Notes to Accounts of Kanishk Steel Industries Ltd.

Mar 31, 2024

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.

e) Buy Back & Bonus issue of Equity Shares

In the period of five years immediately preceeding March 31,2024 , the company had neither bought back equity shares nor issued bonus shares.

1. Refer Statement of Changes in Equity for movement in balance of reserves

2. Nature of reserves

a) Securities Premium Reserve

Securities Premium Reserve represents the amount received in excess of par value of securities and is available for utilisation as specified under Section 52 of Companies Act, 2013

b) General Reserve

The general reserve represents appropriation of profits at the discretion of the Company. It is transferous from one component of equity to another. It is not an item of Other Comprehensive Income. It will not be reclassified to Profit and Loss.

c) Retained Earnings

Retained Earnings generally represent the undistributed profits /amount of accumulated earnings of the Company. Other Comprehensive Income of 25.44 Lakhs as at March 31, 2024 ( 30.81 Lakhs as on March 31,2023) relating to re-measurement of defined benefit plans which cannot be reclassified to Statement of Profit and Loss.

d) Capital Redemption Reserve

Reserve is primarily created as per statutory requirement.

e) Revaluation Reserve

Revaluation Reserve was created under the erstwhile Indian GAAP to recognise the gain due to increase in value of certain assets as on March 31,2008 and utilised in accordance with provisions of the Companies Act, 2013.

f) Capital Reserve

Capital reserve was created erstwhile under Indian GAAP on forfeiture of shares by the company

20.1 Nature of Security and rate of interest:

a. All the above loans are secured by equitable mortgage of land and buildings including plant and machinery and also by hypothecation of Raw Materials and Finished Goods, Corporate guarantee by M/s.Tamilnadu property developers Ltd and also personal guarantee by CMD of the company)

b. The Company has filed quarterly returns or statements with the banks in lieu of the sanctioned working capital facilities, which are in agreement with the books of account

a) Reconciliation of Income tax expense for the year with accounting profit is as follows:

Taxable Income differs from ‘profit before tax’ as reported in the statement of profit and loss because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. Details in this respect are as follows:

c) Deferred Taxes :

Based on the petition filed by the company on 21-04-2008, the Hon’ble High Court of Madras has allowed the company on 19-08-2008 to utilize the Securities Premium account towards the Deferred Tax Liability computed as per (AS-22/ Ind AS 22) Accordingly an amount Nil (Previous Year Nil) adjusted against Securities Premium account as per Directives of Hon’ble High Court Madras.

33. Employee Benefits:

I. Defined contribution plans

The Company participates in a number of defined contribution plans on behalf of relevant personnel. Any expense recognized in relation to these schemes represents the value of contributions payable during the period by the Company at rates specified by the rules of those plans. The only amounts included in the balance sheet are those relating to the prior months contributions that were not due to be paid until after the end of the reporting period. The major defined contribution plans operated by the Company are as below:

(a) Provident and pension

The Company provides provident fund benefits for eligible employees as per applicable regulations wherein both employees and the Company make monthly contributions at a specified percentage of the eligible employee’s salary. Contributions under such schemes are made either to a provident fund set up as an irrevocable trust by the Company to manage the investments and distribute the amounts entitled to employees or to state managed funds.

Benefits provided under plans wherein contributions are made to state managed funds and the Company does not have a future obligation to make good shortfall if any, is treated as a defined contribution plan

(b) Gratuity

Contributions under the scheme for defined benefit plan under the Payment of Gratuity Act, 1972, is determined on the basis of actuarial valuation recognized as year’s expenditure. Actuarial gain and losses arising from experience adjustments and changes in actuarial assumptions are recognized in other comprehensive income. Other costs recognized in the Statement of Profit or Loss.

II. Defined benefit obligation(DBO):

Critical estimate of the DBO involves a number of critical underlying assumptions such as standard rates of inflation, mortality, discount rate, anticipation of future salary increases etc. as estimated by Independent Actuary appointed for this purpose/ Management. Variation in these assumptions may significantly impact the DBO amount and the annual defined benefit expenses.

III. Defined Contribution Plan :

Contribution to Defined Contribution Plans (Provident Fund) recognized as expense for the year 2023-24.

34. Contingencies Liabilities not provided for:
Particulars	2023 - 2024	2022 - 2023
a) Guarantees given by banks on behalf of the
Company	159.00	-
b) Bills discounted with banks	-	-
c) i) Outstanding Letter of Credits	-	-
ii) Outstanding of Under LC/Buyer''s credit / DRUL
bills under collection as on 31-03-2024	-	-
d) Various demands raised which in the opinion of the management are not tenable and are pending with various forums/ authorities
• Central Excise Law~	18.00	18.00
• TNVAT	-	-
• Income Tax / TDS	565.19	682.51

~ ? 9 Lakhs Plus equal amount of penalty of 79 Lakhs plus interest there on.

Note : The Company’s pending litigations comprises of claim against the company and proceedings pending with Taxation/ Statutory/ Government Authorities. The Company has reviewed all its pending litigations and proceedings and has made adequate provisions, and disclosed contingent liabilities, where applicable, in its financial statements. The company does not expect the outcome of these proceedings to have a material Impact on its financial position.

35. Commitments not provided for:
Particulars	2023 - 2024	2022 - 2023
a) Estimated amount of contracts remaining to be executed on Capital Account and not provided for (net of advances)	2,465.43	1,649.56
b) Derivative Contracts Forward Contract Outstanding in USD	-	-

Dues to Micro and Small Enterprises have been determined to the extent such parties have been identified on the basis of information collected by the Management. This has been relied upon by the auditors

37. Disclosures on financial instruments

This section gives an overview of the significance of financial instruments for the Company and provides additional information on balance sheet items that contain financial instruments.

The details of significant accounting policies, including the criteria for recognition, basis of measurement and the basis on which income and expenses are recognized in respect of each class of financial asset, financial liability and equity instrument are disclosed in note 3(ix), to the financial statements.

(a) Financial assets and liabilities

The following tables present the carrying value and fair value of each category of financial assets and liabilities as at March 31,2024 and March 31,2023.

(b) Fair Valuation Techniques

The fair values of the financial assets and liabilities are included at the amount 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.

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

i The fair value of cash and cash equivalents, trade receivables, trade payables, current financial liabilities and borrowings approximate their carrying amount largely due to the short-term nature of these instruments. The Board considers that the carrying amounts of financial assets and financial liabilities recognized in the financial statement approximate their fair value.

ii. Long-term debt has been contracted at floating rates of interest, which are reset at short i ntervals. Fair value of variable interest rate borrowings approximates their carrying value of such long-term debt approximates fair value subject to adjustments made for transaction cost.

iii. The fair value of derivative financial instruments is determined based on observable market inputs including currency spot and forward rates, yield curves, currency volatility etc. These derivatives are estimated by using the pricing models, where the inputs to those models are based on readily observable market parameters basis contractual terms, period to maturity, and maturity parameters such as foreign exchange rates and volatility. These models do not contain a high level of subjectivity as the valuation techniques used do not require significant judgement, and inputs thereto are readily observable from actively quoted market prices. Management has evaluated the credit and a non-performance risk associated with the counterparties and believes them to be insignificant and not requiring any credit adjustments.

During the year ended March 31,2024 and March 31,2023, there were no transfers between Level 1 and Level 2 fair value measurements. There is no transaction / balance under level 3.

The fair value of liquid mutual funds is based on quoted price.

Derivative financial instruments are valued based on quoted prices for similar assets and liabilities in active markets or inputs that are directly or indirectly observable in the marketplace. The inputs used under level II market valuation technique for forward contracts are Forward foreign currency exchange rates and Interest rates to discount future cash flow.

38. Derivatives assets and liabilities:

The Company follows established risk management policies, including the use of derivatives to hedge its exposure to foreign currency fluctuations on foreign currency assets / liabilities. The counter party in these derivative instruments is a bank and the Company considers the risks of non-performance by the counterparty as non-material. The following table presents the aggregate contracted principal amounts of the Company’s derivative contracts outstanding:

(a) Category wise outstanding derivatives contracts entered for hedging as on 31st March 2024: Nil

(b) Unhedged Foreign Currency exposures as on March 31,2024 are as follows: -

(c) Financial risk management

Financial Risk Factors

The company’s activities expose it to a variety of financial risks - Market risk, Credit risk and liquidity risk. The Company’s focus is to foresee the unpredictability of financial markets and seek to minimise potential adverse effects on its financial performance. The primary market risk to the company is foreign exchange risk. The company uses derivative financial instruments to mitigate foreign exchange related risk exposures. The company’s exposure to credit risk is influenced mainly by the individual characteristic of each customer and the concentration of risk from the top few customers. The Company is exposed to market risk, credit risk and liquidity risk. The Company’s senior management oversees the management of these risks. The risks are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company’s policies and risk objectives. The Board of Directors reviews and approves policies for managing each of these risks, which are summarized below:

i. Market Risk

Financial instruments affected by market risk includes borrowings, investments and derivative financial instruments

ii. 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 foreign currency denominated borrowing.

The Company evaluates exchange rate exposure arising from these transactions and enters into foreign currency derivative instruments to mitigate such exposure. The Company follows established risk management policies, including the use of derivatives like foreign exchange forward / option contracts to hedge forecasted cash flows denominated in foreign currency.

As per the hedging policy of the Company, all foreign currency exposures that are due in the next 12 months are either hedged or based on the technical assessment of foreign currency movement against the INR and the premium charged for the hedging, the same might be left un-hedged so as to avail maximum financial benefit to the company. The carrying amount of the Non-Derivative financial instruments in foreign currency as of the end of the reporting period is Nil (Previous year Nil)

The company uses scrap metals which exposes it to be price risk on account of procurement of commodities. The management monitors commodities / raw materials whose prices are volatile and suitable steps are taken accordingly to minimise the risk on the same. The company enter into contract for procurement of material, most of the transactions are short term fixed price contract and a few transactions are long term fixed price contracts.

iv. Interest rate risk

Interest rate risk primarily arises from floating rate borrowing with banks and financial institutions. As of March 31,2024, substantially all of the Company borrowings were subject to floating interest rates, which are reset at short intervals.

v. Credit risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables). To manage this, the management has a credit policy in place and the exposure to credit risk is monitored on an on-going basis. The Company periodically assesses the financial reliability of customers, taking into account the financial condition, current economic trends and ageing of accounts receivable. Individual risk limits are set accordingly.

The Company establishes an allowance for impairment that represents its estimate of incurred losses in respect of trade and other receivables. Receivables from customers are reviewed/evaluated periodically by the management and appropriate provisions are made to the extent recovery there against has been considered to be remote.

The carrying amount of respective financial assets recognized in the financial statements, (net of impairment losses) represents the Company’s maximum exposure to credit risk.

The Company is exposed to credit risk from its operating activities (primarily trade receivables). The Company generally deals with parties which have good credit rating / worthiness given by external rating agencies or based on Company’s internal assessment as listed below:"

Particulars	March 31,2024	March 31, 2023
Trade Receivables	2,137.63	2,757.20

Refer note no.38 (c) for credit risk and other information in respect of trade receivables"

Financial assets that are neither past due nor impaired

Cash and cash equivalents, investment and deposits with banks are neither past due nor impaired. Cash and cash equivalents with banks are held with reputed and credit worthy banking institutions.

vi. Counter-party risk

Counterparty risk encompasses settlement risk on derivative and money market contracts and credit risk on demand and time deposits. Settlement and credit risk is reduced by the policy of

entering transactions with counterparties that are usually banks or financial institutions with acceptable credit ratings. Exposure to these risks are closely monitored and maintained within predetermined parameters. There are limits on credit exposure to any financial institution. The limits are regularly assessed and determined based upon credit analysis including financial statements and capital adequacy ratio reviews. In addition, net settlement agreements are contracted with significant counterparties.

vii. Liquidity risk

Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations on time or at a reasonable price. The Company is responsible for liquidity, funding as well as settlement management. In addition, processes and policies related to such risks are overseen by senior management. The Company monitors its liquidity risk and maintains a level of cash and cash equivalents deemed adequate by management to finance the Company’s operations and to mitigate the effects of fluctuations in cash flows.

The company relies on mix of borrowings, capital infusion and excess operating cash flows to meet its need for funds. The current committed limits are sufficient to meet its short and medium-term requirements. The company ensures that it does not breach any financial covenants stipulated by the lender. In the event of breach of covenants the Company may be liable to pay additional interest. The Company also ensures that it has sufficient cash on demand to meet expected operational expenses. As of March 31,2024, the cash and cash equivalents are held with major banks."

39. Capital Management:

The primary objective of the Company’s capital management is to ensure that it maintains a healthy capital ratio in order to support its business and maximise shareholder value. The Company’s objective when managing capital is to safeguard their ability to continue as a going concern so that they can continue to provide returns for shareholders and benefits for other stake holders. The Company focused on keeping strong total equity base to ensure independence, security, as well as a high financial flexibility for potential future borrowings, if required without impacting the risk profile of the Company.

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. 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 and borrowings that define capital structure requirements. Breaches in meeting the financial covenants would thereby permit the banks/financial institutions to immediately call loans and borrowings. The Company has complied with these covenants and there have been no breaches in the financial covenants of any interestbearing loans and borrowings in the current period.

No changes were made in the objectives, policies or processes for managing capital during the years ended March 31,2024 and March 31,2023.

The Company’s audit committee reviews the capital structure of the Company on periodic basis. As part of this review, the committee considers the cost of capital and the risks associated with the same.

The company also manages its capital to meet financial covenants, if any attached to the borrowings. Non-compliances may result in levy of higher rate of interest on Loans charged by the lenders. At present the company has generally been complying with the financial covenants of the borrowings during the reported period.

40. Segment Reporting:

The Company’s activities during the year revolve around Steel and Steel Products. Considering the nature of Company’s business and operations, as well as based on reviews of operating results by the chief operating decision maker to make decisions about resource allocation and performance measurement, there is only one reportable segment in accordance with the requirements of Ind AS - 108 - ''‘Operating Segments’'', prescribed under Companies (Indian Accounting Standards) Rules, 2016

a) Remuneration to Key Management Personnel is 30 Lakhs

b) Sitting Fees to Directors is 0.56Lakhs

c) Related Party relationship is as identified by the Company and relied upon by the Auditors.

d) All transactions from related parties are made in ordinary course of business. For the year ended March 31 2024, the Company has not recorded any impairment of receivables relating to amounts owed by related parties. This assessment is undertaken each financial year by reviewing the financial position of the related party and the market in which the related party operates.

e) In respect of above parties, there is no provision for doubtful debts as on March 31,2024 and no amount has been written back or written off during the year in respect of debts due from/ to them.

f) Previous year figures have been re-casted/re-stated wherever necessary.

1. Lower return on equity is on account of lower profit after tax during the year.

2. Changes in inventory turnover ratio is due to lower average inventory leve I d u ri n g th e year.

3. Significant investments held by the company is for the compliance of Electricity Act 2002. Therefore benchmarking the return on annual basis will not reflect yield from such investments

44. Other Statutory Information

a. The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.

b. There are no transactions and / or balance outstanding with companies struck off under section 248 of the Companies Act, 2013.

c. The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.

d. The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.

e. The Company has not advanced or loaned or invested funds to any other person(s) or entity (ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

i) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries) or

ii) provided any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries

f. The Company has not received any fund from any person(s) or entity (ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Group shall:

i) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by,or on behalf of the Funding Party (Ultimate Beneficiaries) or

ii) provided any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries

g. The Company does not any transactions which are not recorded in the books of accounts that have been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961)

h. The company does not have any investments through more than two layers of investment companies as per section 2(87) (cd) and section 186 of Companies Act, 2013.

i. The Company has not been declared as willful defaulter by any bank or financial institution or other lender.

j. The Company has entered into any scheme of arrangement which has an accounting impact on current or previous financial year.

44A - Usage of accounting software by the Company:

The Company has used accounting software for maintaining its books of accounts which has a feature of recording audit trail (edit log) facility of each and every transaction, creating an edit log of each change made in books of account, throughout the year as required by proviso to sub rule (1) of Rule 3 of The Companies (Accounts) Rules,2014 known as The Companies (Accounts) Amendment Rules, 2021.

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Mar 31, 2023

xiii] PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

PT-oviskjns involving substantial decree of oslimEtlion n measurement are recognised when there is a leg el or constructive oblivion Q£ a result of past events and il is probable ’hat there will be an outflow bl resources and a reliable estimate can be made of the amount of obhgaion. Provisions are not recognized lor future operating losses. The amount recognized ns a provision ''slhe best eslnnateoftheconsidfirauon required iosetlte the present obligation at the end at the reporting period, taking into account the risks and uncertainties surrounding the Obligation.

Contingent liabilities is nol recognized and are diseased by way ot notes to ihe financial StatEHTiRnts When therei* a possible obligation ari s^;ng from past events, the existence nf which will be confirmed only by 1he occurrence or nOn-oocUrr&rice of One or more Uncertain lulure events not wholly within the control of (he Company or when there is a present obi igaticri is not recognised where it js either not probable that an outflow of resources will be requl red to settle the same or a reliable esfi male of the a mount payable in this reaped cannot be made,

Contingent Assets are not reoogn&ad out cfc&dosett m ihs financial slatemerrls by way o( notes to accounts when an inftow of economic benefits is probable.

xlvl EMPLOYEE BENEFITS

Employee benefits are accrued inlhe year in which services are rendered by the employees Short farm employee benefits are recognized as an expense in Ihe stale-mant qf prqFit and loss furl he year in Which 1h& rented service is rendered. Contribution Id defined conlributscn plans such as Provident Fund ole. Is bemg made In accordanto with statute and aro ^cognised as and when Incurred. Contribution to defined benefit plans consisting oi contribution io gratuity are determined at dose of the year at present value of the amount payable using actuarial valuation techniques. Acfaarie! gain and lasses arising f^rc-n experience adfustmenls and changes in actuarial assumptions art recognized in OthSrCOmprOtiOrtSiv* income. Ol''far lung Lorm employes benefits consisting ol Leave Encash inant are determined at close of the year at present value of the amount payable using actuarial valuaton techniques. The changes in ttie smou nt payable including jarial gain/lnrai ere realign isari in the StHfament of profit and

loss.

XV} REVENUE RECOGNITION

The Company rrantiFHCfijnesand sails Iran and Steel Products.

Sata ol goods

The Company reengnisaa ravenue whan control aver the promised goods nr (services is tra nsFarred to the customer at an amount that neflecla the consideration fa which the Company axpsds to bo onuilod m exchange for those goods or services. The Company has gsn&rafly concluded tfwtlli the principal lr> its iwhiubarrangements as illypically controls the goods or services before transferring them to the customer.

Revenue is adjusted far vanabie consideration such ai discounts, rebates, refands.eredits, price conoessionsjncentives, or other simitar items m a contnact when lhay are highly pfabable to be provided. Tbe amount ol revenue ewfl udes any amount ooltected on behalf ol third parties. The Company recognises revenue generally at the point in time when the ?raducls are delivered to customer orwheo it is delivered fa a carrier far export sale, which is when the control ever product is transferred lo the customer, in contracts where freights arranged bythc Company and recovered from the customers, the same Is treated as a septate peTformenoe obligafiorrand rawonue is recognised whan such froigh-1 servicsssra rendered In revenue arrangements whh multiple performance obligations, the Company accounts far individual producteaod services separately if they ere distind - i.e. ft a product or service is separately identifiable fro mother items In the arrangement and if a customer can benefit from T, TTie consideration is allocated between separate products and services In the arrangement based on their stand-alone eafiinsprioee, Revenue tram sale cf by pmduete are included in revenue. Revenue Inom arileoFpower is reccgnlsed whan delivered and measured based art the bi I ate nil cur Lmclua arrangements.

Centred Balances

I) Contract assets

A contract asset is the nghl to consideration m exchange Ioj goods of services iransferred to the customer. If the Company performs by transferring goods or services to a customer beFme the customer peyg coneiderati.cn qr before payment is due, a contract asset is r&ccgmseiJfarth&flBmSd consid&rslian.

II) Trade receivables

A receivable i& recognised when the goods are delivered and to ihe extent that it tias an unconditional contractual right to reoaiva cash m other (inancia! assets p opty the passage of lima is required before payment Of 1ha -consideration is due) .Trade receivables * Ucnocogmscd when the Company transits substantially all the risks and rewards of ownership of the asset to another party Including discounting of bibs on an on- recourse basis-

ill) Contract tiubititics

A contract liability is the obligation to iransfer goods or services to a custome* for which the Company has received consideration [or an amount nf consideration is due) from the cuHtamer. II a customer pays consideration before the Company transfers goods or services 10 the customer, a contract ll&biiity is recognised when the payment Is made or (ha payment is duo (whichever Is oadlor) Contract llablhtias ano recognised as revenue when the Company performs under the contract Including Advance received from Customer,

IV) FlulUnd liabilities

A refund liability is the obligation 1o refund soma or all of the consideration received (or receivable) From the customer and ie measured a( the amount the Company ultimately expects it will have to return 1c- the customer including volume rebates and discounts. The Company updates its estimates of refund liabilities at the end d each reporting period.

In rarest. Dividend endCtalmi

Dividend income From investment Is recognized when the shareholders nght lo receive payment has been eetabsshed {provided that il is probable that the e«nom ic fi&neffts w:ll flow to the Company and the amounj of inccune can be measured reliably ).l merest income from a financial asset is recognized when it is probable that the economic benetits will 1law io the Company and the amount ol mcomecan be measured rellahfy Interest income ts accrued on a time basis, by reference to the principal outstanding and at the effective mCerosI rais applicable, which ^:slhe rate that exactly discounts estimated future caeh receipts through the expecteu IIFe at the financial aiset to Tat assst''s ret carrying amount on Initial recognition.IImg; ur l-u uiaims/olha r claims are accounted as and- whan admitted /settled.

xvl) SORROWING COSTS

UpirOw: ng costt di racily ah rib .Jtable to the acouis ib''Ch, CGflSimctiOn Or p-eduction or quaErying assets, which are assets that necessarily taka a su bstantial period of lima to gal ready lor thei t intended use or sale, ana added to the cost of those assets, until such Hew as the assets are substantially ready to* tire intended use or sale,

Investment income aarrred usi tareporary invaslmenl or specific borrowings pending (twit expefldlure on qualifying assets is recognized hi the statement of groin and loss

Discounts or premiums and expenses on (tia Isaac ol debl securfftes are amortized ever the

lamrrof th& related securities and ihduded wHhintiortowIrjg costs. Premiums payable on early redemptions ol debt secumles. In lieu oi future finance costs, are recognized as borrowing costs.

Alt other borrowing costs are recognized as expenses In the period hwhitfi It is incurred. nvM) TAXES ON INCOME

Inccme tax expense represSnling LMe sum j- currant tax Expanses and ''ha net charge of the d&ferrad taxes is recogrtoed In the income statement except to l ie extent that il irelatas to items recognized dl racily Inequity wothorcefl^rehenskoiecoJnQ.

Currant income tax is provided an the laxable income and recognized at !he amount expected to be paid Id dr recovered 1 ram- Lhe tax authorities, using Lne tax rates and tax laws that have boon onactod or subslan-lvoly enacted by the end ol tho reporting ponotf.

Deferred tax is recognized on temporary differences between the carrying amounts of a = sets end liabilities in the Financial Staiertvents and the corresponding tax bases used ih the computation ol taxable profit. Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets are tocegnlzcd for all doductiblo temporary differences with respect lo carry forward ot unused tax credits and any unused tax tasses/depreciation to lha extent that it is probable that taxable profits w^:''l be arvsif able against whHSi these can be utilised.

Defamed tax liabilities and assets are measured at the tax rates that are expected to apply in the period In which the I iabilrty is settled or trie asset realized. based on tax rates (and tax laws} lhai have bean enacted or substantively enacted by the and 01 lhe reporting period. Deterred tax assets include Minimum Alternative Tax (MAT) measured in accordance with the tax laws in India, which is lively to gw future economic benefits ip the term of availability of set off against tuture income twe liability and auctl benefits cen he measured reliably end it is probable that the future ecenfririic benefit aserxiafed with asSal wilt be realized.

The carrying arnounl of dolerred tax asets is reviewed at the end ol each repodi ng period and raduoad to the extant that if i? no longer prabshfo that suflierent taxable prof its will be avpi labia to allow all 0< psif of the deferred tax asset ta be uli lizad.

xvlli) EARNINGS PER SHARE

Basic earnings per share Is computed by dividing profit or km for Ihe year attributable la equity holders by the weighted average number of Shares outstanding curing the year. Partly paid-up shares are included as fully- paid eg undents according to tho traction paid up.

Diluted earrings per share are computed uaingthe weighted average number pi shares and diiutive potential shares except where the reSu II would hearti-dilutive.

xixj Segment reporting

Operating sagments are reported in a manner combatant wt1h the internal reporting provided 1o the chief operating decision maker.

The Board ot directorsqf the Company hes been Identified as the Ch>at Operating Decision Maker which reviews and aasewes the financial performance and makes lha strategic decisions.

4, FtEGE NT ACCOUNTING PRONOUNCEMENTS

New Accounting standards, amendments and interpretations adopted by the Company (wh&revfirappf icaijle) affective from A pel 1, £023:

Ministry ol Corpwat^ Alters (“MCA⁴] ratifies row standard or amenffimefits t& the Existing standards under Ccwnpamea (Indian Accounting Standards) Rules as issued lnom tims to tffrte. On March 31, 3023, MCA amended the Companies (Indian Accounting Standards) Rulss. 2D"l5 by issuing the Companies (Indiar Accounting Standard) Amendment Pu.es 2023. applicable from Apnl 1,2023, asbemw:

IndASl -Presentation of Financial Statements

The amendments reqUiracOmyanieEtii disclose Eheir material accounting pcBciafi rather than their significant accounting policies. Accounting policy information, together with dha^r information. £ material when it can reasonably tie expected to influence decisions cl primary users el general purpose financial statements. The Company dees not expect this amendment to have arty signifioant i mpaet in ils hnancial stalements.

ind AS 12- income Taxes

The amendments clarify how companies account for deferred lax on transactions such as leases ard decommissioning abligationa. The smendhlpota narrowed the scone Of the recognition exemption in paragraphs 15 and 24 of tnd A3 12 (recognition exemption) sc that it no forger applies to transactions that, on initial recognition, give rise to equal taxable and deductible temporary differences. The Company is evaluating the impact, if any. in its financial statements.

ind AS S- Accounting Policies. Changes in Accounting Estimates sod Errors

~ho amendments will help entities 1o distinguish between accounting polities and accounting estimates. The defrnitjgn pf a change In aocountlni] estimates has been nee aced with a definition of accounting estimates Under (he new Definition, accounting estimates are ^Jrr:Oheteiy amounts in financial Statement that are subject td measurement uncertainty⁴''. Entities develop accounting estinigies if accounting policies require hems in financial statements io be measured In a way that involves rneasurenKint uncertainly. The Company does not dxpecl this amendment to have any significant impact in Hs financial EtaternSnls.

ind AS 32- interim Flnanelal Reportleg

The amendments require companies to disclose their material accounting policies mtormation rather than their significant accounting policy. The Company docs not CKpoctthls amendment to have any significant imped In its ElnaneiaJ stetemehls.

These amendments ere applicable from Apn| 1, 2033 As per management ihese amendments are Meaty to have no significant impact on the financial statements of the Company.

5. CRITICAL ACC0U NTING EOT MAT ES, JUDGMENTS AND ASS UMPTlON S

Tho preparation of lhe financial statements in conformity with measurement principle of Ind A5 requires mana^arnent to make asfimaEas, judgments and aaaumplions. These astimalas

judgments -and assumptions ansct the application d acdounllnQ policies and the reported arou nts c ¦ assets and liabilities. tne disclosures of contingent assets and Hatx lltles at me date of Ihfl financial statements and reported amounts of revenues and expenses during the period. Aocoyntteg estimates could change From period to period. Actual reapl-ls could differ from luoiB estimates. Appropriate changes in estimates are made as management becomes aware of changes in circumstances surrounding the estimates. Chflerencss between the actual results ano estimates are recognized m (he year fci which the results are Known / materielured and, if materra J, their effects are disclosed in the notes to the financial statements

Application of accounting polices that require significant arses or estimation, in.cartelnty and critical judgments and (ho uso of assumptions in the financial statements have boon disclosed below. The hey assumptions concerning the future and other key sources o( esflmalion/acsumptions at the balance sheet Cats, thaE have a significant risk of causing a material adjustment to the carrying amount cl assets and liabilities and related revenue impact with m i the next financial year are discussed below

a) Ob p recifltionfe mortiialion a nd impel rmenr loss eg ainst property, plant and equipment/ I nte nglijde assets.

Property, pis nt and equipment, FOU Assets and intangible Assets are depreciated/ amortized on straight-line basis over the estimated useful fives tor lease tE-^Fm il shorter) Caking into account the estimated residual value, wherever explicable. The company reviews its carryi ng Value or its Tangible and In tangible Assets whenever thoro is objective avMence lhal tho assets ano impaired. Tho required Jovol ef Imppirmoin losses to bo made <3 estimated by reference to the ggji meted vedije in use or recoverable amount, in such situation Assets'' racaveradla amount is estimated which is hhpher ol asset''s dr Cash Generating Units (OGU) fair value less cast cl disposal end its value in use. In assessing value m use liie estimated future cash hews are discounted using pre-tax discount rate which reflect the current assessment of time value of money. In determining fat value less cost oE disposal, recant market realisations are considered cr otherwise in absence oE such-transactions appropriate valuations are adopted. The Company reviews the estimated usarful lives and residual life ol the assets regularly in order to doEemnno (he amount of appreciation/ amortization and also amount of impairment expense to be recorded and/or to be reversed during any reporting period. Subsequent reassessment or review may result in change ef estimates in future periods.

b) Arrangement contain leases * n a ctas&lf Icatlon of losses

Ind AS if & requrres lessees to deiarmina lha lease term as the non-cancel lable period of a lease adjusted with any option to extend or terminate the lease, il the U3e of such option is reasonably certain. The Company makes an assessment on the expected lease term on a esse by lease basis and thereby assesses whether it is reasonably certain that any option to extend or to/mlria1e Hie contract will be exercised. In evaluating the tease term, the Company considers lactors such as any significant leasehold Improvements undertaken over the lease term, costs relating to the termination or the tesse and (he importance of the underlying asset fa [he company''s operations [eking Info account among other [pings, the location gr [hg underlying a£S£t £rtd the availability cl suitable alternatives. The lease terms and impact thereof are reassessed in each year to ensure that the least lonrt reflects the current

economic circumstances.

d) I mpalrmant laan pfi trade recs iva bles

The Company evaluates whether there is any objective evidence that trade necervables am impaired and Ljo-ierminBS the emounit of Impairment krea ae a result Of the inability ol the debtors Id make required payment. The Company bases- the estimates on the ageing oF the tracts receivables balance, credit-worthiness u'' the trade racsivaales and historical wrila-otf experience.

rj} Deffned Benefit Obligations (DBO)

Crdical estimate of the DBO involves a number qF entice! unpertying assumptions such as standard nates oF inflation. mortality, d isoaunt fate, anticipation oF Future salary Increases etc., as estimated by independent Actuary appointed tor this purpose. Variation in these assumptions may signirlcantly Impact tha DSC amount and tha annual (Scflnod honoflt expanses,

e) Provisions and Canti-ng-encies

Provisions antf liabilities are recognized i n the period when it becomes probable thatthere will be a Mure outflow al funds resulting From past operations or events and the amount cl cash outflow can Pa neliabty estimated. Tna liming r>t recognition and quantification of the liability requires the application of judgement to s»stmg facts and circumstances, which can be subjestto change.

Management usas. in-houss and asternal legal prelessional 10 make judgment For estimating the possible outflow ol resources. If any, in respect of oohtlrigancie&''clafnvlislgalions/ against the Company as It is not possible to pnedictthe outcome of pending matters with accuracy.

The carrying amounts of provisions and liabilities and estimation Tor coniirigarvciee are reviewed raguiariy and revised to taking into account changing Facts amt circumstances.

1. Dun ng the previous yea r. an amount of * 4,427.25 Lawns have been transfe ned from Gene rai Reserve to Retained Earnings

2. Refer Statemant of Changes h Equity for movement in balance ol reserves

3. Natureolreserves

3) Securities Premium Reserve

Securities Premium Reserve represents the amount received In excess of par value of securities aria is ava.idtiis far utilisation as ^peuineJ under BkUw -2 of Companies Act, 201 a

b) General Reserve

The general reserve represents appropriation Df profits OLIhediscretiOttOl the Company. II i£ irangfenous from one component of equity to another. It le not an Hem of Other Comprehensive Income. It will not befsctassitied leProM and Loss.

e) Retained Earnings

Retained Earnings generally represent the undistributed profits /amount of accumulated comings of the Company, Other Comprehensive Income ol Lakhs as at March 31;

2023 (130.54 Lakhs as on March 31.2022) relating to ra-meaauremant ol defined benefit plans whnch canntHie rcdossHied to Statement of Rnofltand Loss.

d) Capital Redemption Reserve

Reserve is primarfly created as per statutory requirement. l-) RMluaHoin Reserve

Revaluation Reee-jvd Was crt*aled under the emtwnile Indian GAAP to recccri sa the gain due lo increase in value of certain assets as on March 31,2006 and utilised in accordance with provisional the Companies Ad20l 3.

f) Capital Reserve

Capital reserve was created erstwhile under Ird''an GAAP on torteitu^|re of shares by the company

33. Employee Benefits i I- Defined Contribution Plan

The Company participates in a number of beFined contribution plans cn behpff of relevant peraonnsl. Any expense recognjzsd ip relation to these schemes represenls the value d1 contributions payable during rhs period by the CdiYlperiy el idles Specified by “ u rules 01 these plan*. The only artdunla Included Fh I he balance Sheet are those delating he the prior months OdntribuliOriS that ware r:ot due to ba paid until after Me end d the reporting period. The major downed contribution plains occratca by the company ate as below:

(a) Provident and pension

The Company provides provident luid befalls tor eligible employees as per applicable regulations whanpan both employees and the Company make monihly conirftiuticins at a specified percentage of 1ha eligible employee’s salary. Conlnbutkjhs under such schemes arc m-ade either to a provident fu nd set up as an inevoceiile trust by fhe Camp? ny to manege |ha irvpslmsnite and dialri bufe tha amounts eMilied¹ Ip employees orto state managed fyntja.

Benetite provided under plans wherein COnlribuNonS are made to stale managed funds and the Company does not have a future obligation to make good shortfall l(any, te treated as a dellnadcontrlbulloh plan

fb) Gratuity

Contributions under the scheme for ? alined benefit plan under ltre Payment of Gratuity Act, 107?. is determined on Ihe basis cf aciLjanal valuation n&cogmzed as year''s expenditure. Actuarial gain and losses arising from experience adjustments ahd Changes ih actuarial assumptions ere recognised in other comprehensive income. Other costs recognized in Ihe Statement of Profit or Loss.

ii. Defined benofll ohiFgnuon (D6C);

CntlcaJ osftmale of the 060 involves a number of critical underlying assumptions such as standard rates of inllarion. mortalily, discount rate, arnjolpatici of fulure- salary increases etc.

(b) Fair Valuation Techniques

The lair valuta oF lha linsncial asset and liabilitita are infifudad at the amount that w£U4d be received to ser| an asset or paid to transfer a liability in an orderly transaction between market participants at he metaUremahl date.

T he following methods and assumptSorte were used to estimate the Tair valute:

I. The Mr value or cash and cash equivalents, trade receivables, trade payables, current

Jinanbial liahilitips and borrowings approximate 1h«ii carrying amount largely due to Ibe short-term nature cd theae instruments. The Board considers lhal the tarrying amounts of JlriHnclalesaets and financial labilities racDgni^ad in the financial statement approximate thekiaJr uoruc

II Long-term debt has boon contracted al Floating rates of kitntib which are rasot at short intervale. Fair value o1 variable interest rate borrowings approximates their parrying value oF such long-term debt approximates lair value subject 1o adjustments made for transection east.

ill. The fair value Pi derivative (In&ntial instruments is determined based col observable markiet inputs including currency spot end Forward rates. yield curves, currency volatility etc. These derivatives are estimated by using ttrt pricing models, where thrfl inputs tu those models ere based on readily observable market parameter basis contractual terms, period 1e maturity, and maturity parameters such as loraign exchange tales and volatility. These modsia dd npt contain a high level pf gubjpcrivfty as the valuation tHjhnJcpjH used do net require slgniflcanl judgement, and inputs thereto ate teadlly observable f mm actively quoted market prices- Management has evaluated the credit and a nompertonmanee nSk associated w^th fhe counterparties and bouevos them lo be i nsinn ticF^nt and not requiring any credit adjustments.

During 1ha yea r ended March 31 2023 and Mb nch 31,2022, here were m transls-ra between Level 1 iiiid Lovai 2idiir va-ue measurements. There is nu transaction/balance under levOl 3

Derivative financial inaEnjmenta snevaJued based pn quoted prices for simitar aaaets and liabilities In active markets or inputs (hat are directly dr indirectly Observable in Erie marketplace. Ti e inputs used under loved ll marmot valuation technique lor toward contracts are Forward foreign currency rachange rates and Irtcrcst rates to discouM Future cash flow.

3 Ei. Derivatives assets arid liabilities:

The Qompgny tpllowa established risk management policies, including the U5fl OF derivatives tD hedge its exposure-to fccE^:gn currency fluctuations on foreign currency assets l liabilities. TTie counter party in those oerivallveinslrunienls Is a bank and the Company considers ihe risks or nonperformance by the oounlerparty as nommalenal. The following latue presents ths aggregate contracted pn ncipal amounts of lhe Company''s denvafrve oontractsoutstandmg:

(a) Category wise outstanding derivatives contract entaredlL-rhedglng as on March 31,2023: Nil

(t) Flnsnciplrirtmsn^mfnt Fmancaal Risk Factors

The company''s activities expose H to a variety of financial risks-Market rtsk, Credit riskand l> quid ity risk. The Company’s focus is to foresee the unpredictadiSty of financial markets and seek to minimise potential adverse effects on its financial performance- The pr-mory market risk tc the company is Foreign exchange risk. The company uses derivative financial instruments lo mitigstE roreign exchange related risk exposures, the company''s exposure to credit risk is Influenced mainly by lhe Individual characteristic of each customer end the oonoontmllon of risk from iho top few customers. The Company |g exposed to market risk, cretfit risk and liquidity rielr. The Company''s senior management nvensfleSthe management aF these risks. Ttia risks ane governed by appropriate policies and procedures and that tinarcial risks are identified, measured ard managed in Mopretacs with the Company''s policies and risk objectives. The Board of Directors neviewsand approves polices for managing each of these risks, which are aummanzed below;

t Market Risk

Financial instruments affected by market nsk includes borrowings, Investments and derivative Financial instruments

II, Foreign Currency Risk

Foreign currency risk js the risk that Ihie Fair value or future cash 1lows oA an asposune will fluctuate because ol changes in lore^gn exchange rales, Ttie Company''s exposure to the risked changes in foreign exchange rates states primarily to the Company''s foreign currency denominated borrowing.

The Company evaluates exchange rate exposure arising from these irensBctkjnB and enters into foreign currency derive rive instruments to mitigate- such exposure. TTie Company fal''ows established risk management poi-cias, includrngth&useor denvatives like lareign exchanca foftvard / option contracts Jo hedge forecasted cash flows d&nomlnalwJ in loreign currency.

As par the hedging policy of [he Company, all fora gn currency exposures that are due in ''ha next 12 months are either hedged or based on the iechnical assessment of foreign currency movement against the INR and the premium charged for the hedgmg, the same might be loft uri-hedged so as to avail manmim fi nanaal bnnelit to the company. The carrying amount of the Non-DartvaJive financial instruments In foreign currency as g1 the end of the reporting period is Nil {Previous year Nil)

The company is principally exposed to foreign currency riak against U5E>. Sensitivity of profit or loss anses mainly from USD denomi naiad receivables and payables are as fallows:

ii I. Commodity p rice ri sk

I''hti company LJ«S Strip ntaltlfi which SkpcsGS it to be price risk on acCOUht ?'' prOcurflmehl or commodllfoe, 7 ho rnanagam&nt monitors comnwdlh&s / raw malpmue whoso prices are volatilo and su''tabfo slops ere taken accordingly to minimiso the risk on the game, ^"ho company enter into contract (Dr procg remsrit oF material, most af The transactions are shortterm fixed price camtraci and a Few transactions are long term lived price coiMrade.

tv. Interest rata risk

interest rate risk primarily arises Trom floating rate borrowing with bante and financial inalltutiens. As erf March 31.2023, substantially all _nf |he Company borrowings were outlet to floating interest rates, whch art reset el short Intervals.

v. Credit risk

¹ Credit risk Is the risk that counterparty wilt not meet its obligations under aftfianciai Instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trace recaivabresj. Ta manage this., the management has a credit policy in placa and the exposure to credit risk i6 mCnilDrtd Ori an or-going basis. The Company penadicaily assesses the llnanclal reliability of customers, taking Into account the financial condition, current economic trends and ageing of accounts receivable. Individual ra*. limrisare set acoo riding By.

The -Company establishes an allowance fur impairment that represents its estimate of incurred losses In respect of trade and oilier receivables, Receivables Inom customers are neviewed/evalualed periodically by the management and appropriate provisions are made 10 the ejerem racoverythere against has been considered to bflrtmutH.

The carrying amount of respective financial assets recognized in the financial statements, [net or Impairment losses^ represent* the Company''s majiitnuta expose ro to crod it risk.

The Company 15 exposed to credn nsk Inom its operating activities (primarily made receivables}. Tlie Company generally d^sls with parties which hpve good credit rating / worthiness given by external rating agencies ar based cn Company''s internal assessment as listed colow:''

yl. Counter- Party Risk

Counterparty risk encompasses settlement risk on dativalive end money market contracts and credit ns* on demand and time doposlts. Saltlomofit and credit risk is roducod by too policy of entering transactions with counterparties that are usually brinks or financial institutions with

accepted i credit ratings. Exposure to these risks are cloSaly monitored and maintained within predatomnmod parameters. There ene limits on credit exposure to any financial mslilutan. The limits are regularly assessed and determined based upon credit analysis including financial Statements and cflpitflJ adequacy ratio reviews. In addition, net settlement agreements ere contracted wih signlllcanl counterpa dlea.

Vil. Liquidity risk

''Liquidity liafttsdelinerf as 13 i&rlskthat the Company will not be able to settle or meet its obligations on time or at a reasonable price. The Company Is responsible for i.rjuldlty_r funding as well as settlement management. In addition prcoeeees end policies related Eesuch risks eje avBrsEen by ¦Hilar management. The Company monitors its liquidity risk and mamtamsa favelot casn and cash equivalents deemed adequate by management to finance the Company''s operations and to mitigate the effects nf fluctuations in cash Howe The company reliee on mixd bomowinga, capital infusion and excess operating cash Hows to meet its need for funds. The current committed timas pie sufficient to meet its short and medium-term requirements. The company e*isureethat d does not breach any Financial covenant stipulated by the lender. In 1he event of breach at covenants Ihe Company may be liable to pay additional intorcst The Company also ensures that it has sufficient ceah on demand to meet expected operalinnel expenses. A&pf Mqnch 31,2023 ttiecflghand cash equivalents are held with major banks."

39. Capital Management:

The primary objective of the Company''s capital management is to ensure that il maintains a hea''thy capital ratio in order to support rts business and mammlsc shareholder value. The Company''s objective when mending capita! is to safeguard their ability to mnHnue as agoing concern so that they can continue to provide returns Tor shareholders and benEflls far other stake hcEders. The Company focused on keeping strong total oqutly base to tnsu ro i ndnpeodcnce, security, as wefl as a high financial flexibility lor potential future borrowings, it required without i mpacting the risk profile Of the Company.

The Company manages ils capifal structure and makes adjustments in light of changes in economic conditions and the naquiremonls of the financial covenants. In order to achieve this overall objective, tfiB Company’s capital rnHnagemarH, amongaT pfherthmgs, aims to anou ns that it masts financial covenants afiachscf 1o Ihe mtarasE-bearmg and Lor-uw ugs that define capital sttuduro feqmramsrits. Broaches *i meeting Ihe financial covenant would thereby permit qhe banJcs/financial institutibnsto immediately call leans and borrowings. The Company has complied with these covenants and there have been no breaches in ifie financial covenants of any Interns!-beanng loans and borrowings m the coirentpenod.

No changes were made In the objectives, policies or processes lor managing capital during Ihe years ended March 31.2023- and Ma rph 31,2022.

The Company''s aLbdrf committee reviews the capital structure of the Company on periodic basis. As pad of this review, the committee considers ihu cost of capital and the risks associated .with lbs same.

4D. Segment Reporting:

Tbs Company''s activities during the year revolve around Steel and Steel Products. Considering tho nature ol Company''s business andoporations, as well as based on rovkms of operating nesuhs by the chief operating decision mgkerto make decisions eboul resource allocation and perlormanee measurement there:sonly one T-spcrtabla segment in aooandanca with 1ha nequirerrwnis t>1 Ind AS -10ft "Operating Segments". presented under Companies [Indian Accounting Standards) flulos, £016

q, U-tldsallwi of borrowed funds and share premium

I) The Company haa not advanced or loaned or Invested funds to any other parson^} or entity (iOs), including roraign Ontilicus (IntOrmodiaripi} with thO understanding 1hnl Lhf> Intermediary shell: directly or indirectly lond or invest in other persons or sritities dertified In any narinoi whatsoever by or on bshari o^J 1ha Company (Ultimata HerieJlcadea) or -provided any guarantee, Security or the like to or on tahatf trf the UlUtnalc Beneficiaries" ii) The Company has not receiwd any fund ¦from any parson(E) or entityfiasl, inducing Fomign amitlas (Funding Patty} with tha uTdeiEtarOng (whalher recorded n wrung or orserwlse} IhattheG''wjpshtiii

diraedy or indireclly lend or in''^st in olhar persons or entries identfriod n any mariner whatsoever byor on oehs''l of tne Furdmg Ik arty (Lilt mate Benehaarles} or - provIdflQ anygueranloe, security ot tno liko to ornn bohslJ of |ha Ultimate R(innntlarlo&" h, Undisclosed Income

The Company does no; any transactions whit* are not recorded ir the bccha ol accounts that have Linen surrendered or discLosed as income Ugrirc the year In 1ha bah Assessments under the Income Ta* Act, 1961 (such as. iiiardr-m survey or any mbor rciftvam provistonsuf tho Inoomo T« Act, 1961 }''

L Dels iteolcryptocurrency or virtual currency

Tha Company has not traced or Invested m Crypto ctiirency or Virtual Currency aurtng tha financal year,''

j. Registration of charges or saltsf action wlEh Fegladar of Companies

Tha Comoany does not have any charges or satisfaction which Is yat to be registered wltft ROC toyur nJ 1ht statutory poriwl."

43 A, Previous years figures have been reca&ted / restated wherever necessary

As par the report of even date annexed For and on behalf oF (he Board of Directors

For CHAT JHVEDI & P ART N E R B KAN ISHK STEEL INDUSTRIES LIMIT EE

CFiarfoied AOMtltttWlrf*

FRN 3DJQUE VlSHA L KE YAL ASHOK 80Hfl A

H M AHE5WARL, AC A Chatman i Managirg Director WftrMe-frme Director & CFO

Partner

M. NIK *1*14 HEN* SINGH

Onto ''?605-20?J Company Secretary

Place: Chennai

---

Mar 31, 2018

Note 1

Notes to Financial Statements for the year ended 31st March, 2018

1. Company overview:

1a) Corporate Information

Kanishk Steel Industries Limited (“the Company”), is a Company incorporated under the provisions of Companies Act, 1956, in the year 1989, having its registered office at B27M, Sipcot Industrial Complex, GummidipoondiThiruvallur District-601201 It is engaged in the manufacture and supply of Iron and Steel Products. The Company’s shares are listed on the Bombay Stock Exchange Limited and the shares are traded regularly.

2. Basis of Preparation of Financial Statements

2a) Statement of Compliance

In accordance with the notification dated 16th February 2015, issued by the Ministry of Corporate Affairs, the Company has adopted Indian Accounting Standards (referred to as “Ind AS”) notified under the Companies (Indian Accounting Standards) Rules, 2015 (as amended) with effect from April 1, 2016.

The Financial Statements have been prepared in accordance with Ind AS notified under the Companies (Indian Accounting Standards) Rules, 2015 (as amended) read with Section 133 of the Companies Act, 2013 (“the Act”).

The financial statement upto the year ended March 31, 2017, were prepared under the historical cost convention on accrual basis in accordance with the Generally Accepted Accounting Principles (Previous GAAP) applicable in India and the applicable Accounting Standards as prescribed under the provisions of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014.

Previous period figures in the Financial Statements have been restated in compliance to Ind AS. In accordance with Ind AS 101- “First Time adoption of Indian Accounting Standards” (Ind AS 101), the Company has presented a reconciliation of Shareholders’ equity as given under Previous GAAP and Ind AS as at March 31, 2017, and April 1, 2016 and of the Net Profit as per Previous GAAP and Total Comprehensive Income under Ind AS for the year ended March 31, 2017 in Note No. 45.

These are the Company’s first Ind AS Financial Statements. The date of transition to Ind AS is April 1, 2016. The mandatory exceptions and optional exemptions availed by the Company on First-time adoption have been detailed in Note 45(a).

2b) Recent Pronouncements

New Standards / Amendments to Existing Standard issued but not yet effective upto the date of issuance of the Company’s Financial Statement are disclosed below:

On 28th March, 2018, the Ministry of Corporate Affairs (MCA) has notified Ind AS 115

- Revenue from Contracts with Customers and certain amendment to existing Ind AS. These amendments shall be applicable to the Company from 1st April 2018.

i. Ind AS 115-Revenue from Contracts with Customers Ind AS 115 supersedes Ind AS 11, Construction Contracts and Ind AS 18, Revenue. Ind AS 115 requires an entity to report information regarding nature, amount, timing and uncertainty of revenue and cash flows arising from contract with customers. The principle of Ind AS 115 is that an entity should recognise revenue that demonstrates the transfer of promised goods and services to the customers at an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services.

Based on preliminary assessment performed by the Company, the impact of the application of the standard is not expected to be material.

ii. Amendment to Existing issued Ind AS

a) Ind AS 12 - Income Taxes

b) Ind AS 21 - The Effects of Changes in Foreign Exchange Rates

c) Ind AS 28 - Investment in Associates and Joint Ventures and

d) Ind AS 112 - Disclosure of Interests in Other Entities

The impact of the above standards on the financial statements, as assessed by the Company, is not expected to be material

2c) Critical accounting judgments, assumptions and key sources of estimation and uncertainty

The preparation of the financial statements in conformity with the measurement principle of Ind AS requires management to make estimates, judgments and assumptions. These estimates, judgments and assumptions affect the application of accounting policies and the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the period. Accounting estimates could change from period to period. Actual results could differ from those estimates. Appropriate changes in estimates are made as management becomes aware of changes in circumstances surrounding the estimates. Differences between the actual results and estimates are recognized in the year in which the results are known / materialized and, if material, their effects are disclosed in the notes to the financial statements.

Application of accounting policies that require significant areas of estimation, uncertainty and critical judgments and the use of assumptions in the financial statements have been disclosed below. The key assumptions concerning the future and other key sources of estimation uncertainty at the balance sheet date, that have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities within the next financial year are discussed below:

2d. i. Depreciation / amortization and impairment on property, plant and equipment / intangible assets

Property, plant and equipment are depreciated on Straight line Method over the estimated useful lives (or lease term if shorter) in accordance with Schedule II of the Companies Act, 2013, taking into account the estimated residual value, wherever applicable. The Company reviews the estimated useful lives of the assets regularly in order to determine the amount of depreciation / amortization expense to be recorded during any reporting period. This reassessment may result in change in depreciation expense in future periods.

The company reviews its carrying value of its Tangible Assets whenever there is objective evidence that the assets are impaired. The required level of impairment losses to be made is estimated by reference to the estimated value in use or recoverable amount.

2d. ii. Impairment loss on trade receivables

The Company evaluates whether there is any objective evidence that trade receivables are impaired and determines the amount of impairment loss as a result of the inability of the debtors to make required payments. The Company bases the estimates on the ageing of the trade receivables balance, credit-worthiness of the trade receivables and historical write-off experience. If the financial conditions of the trade receivable were to deteriorate, actual write-offs would be higher than estimated.

2d. iii. Income taxes

Significant judgment is required in determination of taxability of certain income and deductibility of certain expenses during the estimation of the provision for income taxes.

2d. iv. Contingencies

Management judgment is required for estimating the possible outflow of resources, if any, in respect of contingencies/claim/litigations/ against the Company as it is not possible to predict the outcome of pending matters with accuracy. Based on management best estimates the same does not qualify for recognition in the financial statements.

2d. v. Arrangements containing leases and classification of leases

The Company enters into service / hiring arrangements for various assets / services. Thedetermination of lease and classification of the service / hiring arrangement as a finance lease or operating lease is based on an assessment of several factors, including, but not limited to, transfer of ownership of leased asset at end of lease term, lessee’s option to purchase and estimated certainty of exercise of such option, proportion of lease term to the asset’s economic life, proportion of present value of minimum lease payments to fair value of leased asset and extent of specialized nature of the leased asset.

2d. vi. Insurance Claim and Liquidated damages

Insurance claims are accounted as and when admitted/settled. Liquidated damages and penalties from the vendors are accounted for in accordance with the terms of agreement for loss of opportunity/profit of the company due to delay in completion if balances are available in the Supplier’s Account. Subsequent changes in value if any in value are provided for.

2d. vii. Defined benefit obligation (DBO)

Critical estimate of the DBO involves a number of critical underlying assumptions such as standard rates of inflation, mortality, discount rate, anticipation of future salary increases etc. as estimated by Independent Actuary appointed for this purpose/ Management. Variation in these assumptions may significantly impact the DBO amount and the annual defined benefit expenses.

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 havinga 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 afterdistribution of all preferential amounts.

Fair Valuation Techniques

The fair values of the financial assets and liabilities are included at the amount 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.

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

a) The fair value of cash and cash equivalents, trade receivables, trade payables, current financial liabilities and borrowings approximate their carrying amount largely due to the short-term nature of these instruments. The Board considers that the carrying amounts of financial assets and financial liabilities recognized in the financial statement approximate their fair value.

b) Long-term debt has been contracted at floating rates of interest, which are reset at short intervals. Fair value of variable interest rate borrowings approximates their carrying value of such long-term debt approximates fair value subject to adjustments made for transaction cost.

c) The fair value of derivative financial instruments is determined based on observable market inputs including currency spot and forward rates, yield curves, currency volatility etc. These derivatives are estimated by using the pricing models, where the inputs to those models are based on readily observable market parameters basis contractual terms, period to maturity, and maturity parameters such as foreign exchange rates and volatility. These models do not contain a high level of subjectivity as the valuation techniques used do not require significant judgement, and inputs thereto are readily observable from actively quoted market prices. Management has evaluated the credit and a non-performance risk associated with the counterparties and believes them to be insignificant and not requiring any credit adjustments.

Fair value hierarchy

The Company categorizes assets and liabilities measured at fair value into one of three levels depending on the ability to observe inputs employed in their measurement which are described as follows:

Figures in round brackets ( ) indicate figures as on 31st March 2017 and in brackets [ ] indicate figures as of 1 st April, 2016

During the year ended March 31, 2018 and March 31, 2017, there were no transfers between Level 1 and Level 2 fair value measurements. There is no transaction / balance under level 3.

The fair value of liquid mutual funds is based on quoted price.

Derivative financial instruments are valued based on quoted prices for similar assets and liabilities in active markets or inputs that are directly or indirectly observable in the marketplace. The inputs used under level II market valuation technique for forward contracts are Forward foreign currency exchange rates and Interest rates to discount future cash flow

Derivatives assets and liabilities:

The Company follows established risk management policies, including the use of derivatives to hedge its exposure to foreign currency fluctuations on foreign currency assets / liabilities. The counter party in these derivative instruments is a bank and the Company considers the risks of non-performance by the counterparty as non-material. The following table presents the aggregate contracted principal amounts of the Company’s derivative contracts outstanding:

(a) Category wise outstanding derivatives contracts entered for hedging as on 31st March 2018: Nil

(b) Unhedged Foreign Currency exposures as on March 31, 2018 are as follows: -

The foreign exchange forward and option contracts mature within twelve months. The table below analyses the derivative financial instruments into relevant maturity groupings based on the remaining period as of the balance sheet date:

Financial Risk Factors

The company’s activities expose it to a variety of financial risks - Market risk, Credit risk and liquidity risk. The Company’s focus is to foresee the unpredictability of financial markets and seek to minimise potential adverse effects on its financial performance. The primary market risk to the company is foreign exchange risk. The company uses derivative financial instruments to mitigate foreign exchange related risk exposures. The company’s exposure to credit risk is influenced mainly by the individual characteristic of each customer and the concentration of risk from the top few customers. The Company is exposed to market risk, credit risk and liquidity risk. The Company’s senior management oversees the management of these risks. The risks are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company’s policies and risk objectives. The Board of Directors reviews and approves policies for managing each of these risks, which are summarized below:

i. Market Risk

Market risk is the risk or uncertainty arising from possible market price movements resulting in fluctuation of the fair value of future cash flows of a financial instrument. The major components of Market risks areprice risk, interest rate risk and foreign currency exchange risk.

Financial instruments affected by market risk includes borrowings, investments and derivative financial instruments.

3 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 foreign currency denominated borrowing.

The Company evaluates exchange rate exposure arising from these transactions and enters into foreign currency derivative instruments to mitigate such exposure. The Company follows established risk management policies, including the use of derivatives like foreign exchange forward / option contracts to hedge forecasted cash flows denominated in foreign currency.

As per the hedging policy of the Company, all foreign currency exposures that are due in the next

4 months are either hedged or based on the technical assessment of foreign currency movement against the INR and the premium charged for the hedging, the same might be left un-hedged so as to avail maximum financial benefit to the company. The carrying amount of the Non-Derivative financial instruments in foreign currency as of the end of the reporting period are as follows:

(*) Figures in round brackets ( ) indicate figures as on 31st March 2017 and in brackets [ ] indicate figures as of 1st April, 2016

The company is principally exposed to foreign currency risk against USD. Sensitivity of profit or loss arises mainly from USD denominated receivables and payables are as follows:

iii) Commodity price risk

The company uses scrap metals which exposes it to be price risk on account of procurement of commodities. The management monitors commodities / raw materials whose prices are volatile and suitable steps are taken accordingly to minimise the risk on the same. The company enter into contract for procurement of material, most of the transactions are short term fixed price contract and a few transactions are long term fixed price contracts.

iv) Interest rate risk

Interest rate risk primarily arises from floating rate borrowing with banks and financial institutions. As of March 31, 2018, substantially all of the Company borrowings were subject to floating interest rates, which are reset at short intervals.

v) Credit risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables).To manage this, the management has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis. The Company periodically assesses the financial reliability of customers, taking into account the financial condition, current economic trends and ageing of accounts receivable. Individual risk limits are set accordingly. Further the company obtains necessary security including letter of credits and / or bank guarantee to mitigate its credit risk.

The Company establishes an allowance for impairment that represents its estimate of incurred losses in respect of trade and other receivables. Receivables from customers are reviewed/ evaluated periodically by the management and appropriate provisions are made to the extent recovery there against has been considered to be remote.

The carrying amount of respective financial assets recognised in the financial statements, (net of impairment losses) represents the Company’s maximum exposure to credit risk.

The concentration of credit risk is limited due to the customer base being backed by the government order and unrelated. Of the trade receivables balance at the end of the year, Rs.16,15,07,971.81 is due from BHEL, the Company’s largest customer. The customer accounted for more than 29.08% and 16.15% of the accounts receivable as at March 31, 2018 and 2017, respectively and more than 23.64% and 15.87% of revenues for the year ended March 31, 2018 and 2017, respectively.

Financial assets that are neither past due nor impaired

Cash and cash equivalents, investment and deposits with banks are neither past due nor impaired. Cash and cash equivalents with banks are held with reputed and credit worthy banking institutions

vi) Counter-party risk

Counterparty risk encompasses settlement risk on derivative and money market contracts and credit risk on demand and time deposits. Settlement and credit risk is reduced by the policy of entering transactions with counterparties that are usually banks or financial institutions with acceptable credit ratings. Exposure to these risks are closely monitored and maintained within predetermined parameters. There are limits on credit exposure to any financial institution. The limits are regularly assessed and determined based upon credit analysis including financial statements and capital adequacy ratio reviews. In addition, net settlement agreements are contracted with significant counterparties.

vii) Liquidity risk

Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations on time or at a reasonable price. The Company is responsible for liquidity, funding as well as settlement management. In addition, processes and policies related to such risks are overseen by senior management. The Company monitors its liquidity risk and maintains a level of cash and cash equivalents deemed adequate by management to finance the Company’s operations and to mitigate the effects of fluctuations in cash flows.

The company relies on mix of borrowings, capital infusion and excess operating cash flows to meet its need for funds.The current committed limits are sufficient to meet its short and medium-term requirements. The company ensures that it does not breach any financial covenants stipulated by the lender. In the event of breach of covenants the Company may be liable to pay additional interest. The Company also ensures that it has sufficient cash on demand to meet expected operational expenses. As of March 31, 2018, the cash and cash equivalents are held with major banks.

Capital Management:

The primary objective of the Company’s capital management is to ensure that it maintains a healthy capital ratio in order to support its business and maximise shareholder value. The Company’s objective when managing capital is to safeguard their ability to continue as a going concern so that they can continue to provide returns for shareholders and benefits for other stake holders. The Company focused on keeping strong total equity base to ensure independence, security, as well as a high financial flexibility for potential future borrowings, if required without impacting the risk profile of the Company.

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. 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 and borrowings that define capital structure requirements. Breaches in meeting the financial covenants would thereby permit the banks/financial institutions to immediately call loans and borrowings. The Company has complied with these covenants and there have been no breaches in the financial covenants of any interest-bearing loans and borrowings in the current period.

No changes were made in the objectives, policies or processes for managing capital during the years ended 31st March 2018 and 31st March 2017.

The Company’s audit committee reviews the capital structure of the Company on periodic basis. As part of this review, the committee considers the cost of capital and the risks associated with the same.

The company also monitors capital using gearing ratio which is net debt divided by total capital. The gearing ratios as at 31st March, 2018, 31st March, 2017 and 1st April, 2016 are as follows

The company also manages its capital to meet financial covenants, if any attached to the borrowings. Non-compliances may result in levy of higher rate of interest on Loans charged by the lenders. At present the company has generally been complying with the financial covenants of the borrowings during the reported period.

5. Commitments not provided for: Nil

6. Disclosure of Trade Payables under current/Non-Current liabilities is based on the information available with the company regarding the status of the suppliers as defined under the “Micro, Small and Medium Enterprises Development Act, 2006” (the Act). There are no delays in payment made to such suppliers and there is no overdue amount outstanding as at the Balance Sheet date. Based on the above the relevant disclosure u/s 22 of Act are as follows:

7. The disclosures required under Ind AS 19 “Employee Benefits”, the disclosures as definec are given below :

Defined Contribution Plans:

Contribution to Defined Contribution Plans (Provident Fund) recognized as expense for the year 2017-18 is Rs.

8. Segment Reporting:

The Company’s activities during the year revolve around Steel and Steel Products. Considering the nature of Company’s business and operations, as well as based on reviews of operating results by the chief operating decision maker to make decisions about resource allocation and performance measurement, there is only one reportable segment in accordance with the requirements of Ind AS - 108 - ‘‘Operating Segments’’, prescribed under Companies (Indian Accounting Standards) Rules,2016.

9. RELATED PARTIES DISCLOSURES

Related party disclosure as identified by the management in accordance with the Indian Accounting Standard (Ind AS) 24 on “Related Party Disclosures” are as follows:

a) Key Management Personnel & their relatives (KMP):

Mr. Kanishk Gupta, Chairman & Managing Director Mr. Vishal Keyal, Whole time Director & CFO Mr.R. Balaji Ravi Gopal, Company Secretary

Other related parties:

1. Gita Renewable Energy Limited.

2. OPG Renewable Energy Private Limited.

3. OPG Business Centre Private Limited.

4. Indian Corporate Business Centre Limited.

5. Kanishk Metal Recycling Private Limited.

6. OM Power Sakthi India Private Limited

7. OPG Energy Private Limited

10. FIRST TIME ADOPTION OF IND AS

In terms of Ind AS 101, “First-Time Adoption of Indian Accounting Standards” the required reconciliation of equity, other comprehensive income and cash flows with respect to the figures reported under the previous GAAP are as under:

(i) Reconciliation of equity as at 31st March, 2017 and 1st April, 2016

MANDATORY EXCEPTIONS AND OPTIONAL EXEMPTIONS

These financial statements are covered by Ind AS 101, “First Time Adoption of Indian Accounting Standards”, as they are the Company’s first Ind AS financial statements for the year ended March 31, 2018.

Overall principle:

The Company has adopted Ind AS with effect from 1st April 2016 with comparatives being restated. The figures for the previous period have been restated, regrouped and reclassified wherever required to comply with the requirement of Ind AS and Schedule III by recognizing all assets and liabilities whose recognition is required by Ind AS, not recognizing items of assets or liabilities which are not permitted by Ind AS. The accounting policies that the Company used in its opening Ind-AS Balance Sheet may have differed from those that it used for its previous GAAP. Accordingly the impact of transition has been provided in the Opening Reserves as at 1st April 2016. However, this principle is subject to certain mandatory exceptions and certain optional exemptions availed by the Company as detailed below.

a) Exemptions from retrospective application

i. Fair value as deemed cost exemption

The Company has elected to measure items of property, plant and equipment at its carrying value at the transition date.

ii. De-recognition of financial assets and financial liabilities

The Company has applied the de-recognition requirements of financial assets and financial liabilities prospectively for transactions occurring on or after April 1, 2016 (the transition date).

iii. Impairment of financial assets

Ind AS 109 “Financial Instruments” requires the impairment to be carried out retrospectively; however, as permitted by Ind AS 101, the Company, has used reasonable and supportable information that is available without undue cost or effort to determine the credit risk at the date that financial instruments were initially recognized in order to compare it with the credit risk at the transition date. Further, the Company has not undertaken an exhaustive search for information when determining, at the date of transition to Ind AS, whether there have been significant increases in credit risk since initial recognition, as permitted by Ind AS 101.

b) Explanatory Notes to reconciliation between Previous GAAP and Ind AS:

i. Property, Plant & Equipment:

The company has ascertained major components of Plant & Machinery and reviewed its useful Life in terms of Ind AS as on the date of transition. Accordingly an amount of Rs.1,84,03,512/- has been adjusted as on transition date and this has resulted in reduction in depreciation to the extent of Rs.42,42,003 for the year ended 31-03-2017.

ii. Investment in Other Equity

The company has ascertained major components of Plant & Machinery and reviewed its useful Life in terms of Ind AS as on the date of transition. Accordingly an amount of Rs.1,84,03,512/- has been adjusted as on transition date and this has resulted in reduction in depreciation to the extent of Rs.42,42,003 for the year ended 31-03-2017.

iii. Defined benefit liabilities

Both under previous GAAP and Ind AS, the Company recognizes costs related to its post-employment defined benefit plan on an actuarial basis. Under previous GAAP, the entire cost, including actuarial gains and losses, are charged to Statement of Profit and Loss. Under Ind AS, re-measurements [comprising of actuarial gains and losses, the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit liability and the return on plan assets excluding amounts included in net interest on the net defined benefit liability] are recognized immediately in the balance sheet with a corresponding debit or credit to equity through Other Comprehensive Income (OCI).

Under Ind AS, the entity is permitted to transfer amounts recognized in the Other Comprehensive Income within equity. The Company has taken recourse of the said provision and has transferred all re-measurement costs recognized relating prior to the transition date from Retained earnings as on the date of transition as permitted under Ind AS.

Thus, the employee benefit cost is reduced by Rs.41,80,629 on transition date and Rs.11,08,654 for the year 2016-17 and re-measurement losses on defined benefit plans has been recognized in the Other Comprehensive Income, net of tax.

iv. Taxation

The Company has accounted for current and deferred tax on various adjustments between previous GAAP and Ind AS at the tax rate at which they are expected to be reversed.

v. Other Adjustments:

The company has accounted for Deferred Tax Liability of Rs. 3,48,28,160 under the previous GAAP. However, the same was reviewed and Rs.46,84,942 is reversed from reserves on 31-03-2017

Previous GAAP figures have been reclassified /regrouped wherever necessary to confirm with financial statements prepared under Ind AS.

11. These financial statements were approved for issue by the Board of Directors of the Company on 30th May 2018 and are subject to approval by the shareholders in the ensuing annual general meeting.

---

Mar 31, 2015

1. 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. Terms of Repayment and rate of interest:

HP Loan of Rs.1,199,000/- is repayable in 24 monthly instalments of Rs.55,605/- each and it carries an interest @ 10.50 % p.a

HP Loan of Rs.1,070,000/- is repayable in 24 monthly instalments of Rs.49,622/- each and it carries an interest @ 10.50 % p.a.

3. Security:

Secured HP Loans from Bank / Financial Institutions are secured by the respective Vehicles and Machinery.

Notes attached to and forming part of the Balance Sheet as at 31-3-2015 and the Statement of Profit and Loss for the period ended on that date:

4. Company overview:

Kanishk Steel Industries Limited (the company) incorporated under the Companies Act, 1956, in the year 1989, is engaged in the manufacture and supply of Iron and Steel products. The company's shares are listed on the Bombay Stock Exchange Limited and the shares are traded regularly.

5. Additional Information to the Financial Statements

i) Contingent liability not provided for:

(a) Counter Guarantees furnished to bank Rs.1,54,05,800/- (Previous year Rs.1,04,37,200/-)

(b) Towards outstanding Letters of Credit Rs.11,17,56,109/-(Previous year Rs.25,45,74,922/-) on account of import of raw materials.

ii) Claims against the company not acknowledged as debt:

a) towards the disallowance of deemed Credit to extent of Rs.2,34,094/- under Rule 57-I of the Central Excise Rules, 1944 read with Section 11-A of Central Excise Act, 1944 made on the erstwhile Avanti Oil and Steel Industries Private Limited, the transferor company. Matter under appeal before Commissioner of Central Excise (Appeals) Chennai.

b) towards the demand of Rs.35,66,000/- plus penalty of an equal amount plus interest thereon for re-fixation of Annual Capacity of Production (ACP) by the Commissioner of Central Excise on the erstwhile OP Steels Limited, the transferor company. Company has filed a stay petition and the matter is pending before Hon'ble High Court of Madras.

c) towards the demand of differential duty of Rs.52,38,000/- (Rs.87,25,000/- less Rs.34,87,000/- already paid) plus interest and penalty as per the provisions of the Central Excise Act, 1944 as per the show cause notice no:2/06 dated 171-2006 issued by the Commissioner of Central Excise, Chennai claiming wrong adoption of assessable value for the excisable goods cleared from factory to depots. Company has won the appeal before the settlement commission. The Central Excise Department has filed an appeal in the Hon'ble High Court of Madras against the orders of the settlement commission.

d) towards the demand of Rs 9,00,000/- plus penalty of an equal amount plus interest thereon for re-fixation of Annual Capacity of Production(ACP) by the Commissioner of Central Excise. The matter is pending before Hon'ble High Court of Madras.

e) towards the demand of Central Excise duty of Rs.69,06,945/- plus equal amount of penalty plus interest of Rs.50,12,040/- plus fine of Rs.5,00,000/- (total demand Rs.1,93,25,930/- and Rs.1,36,45,721/- paid there-against) - matter under appeal with CESTAT, Chennai.

6. Depreciation:

a. Revaluation of Fixed Assets:

Fixed Assets pertaining to Rolling Division of the Company have been revalued on 31.03.2008, corresponding credit given to the Revaluation Reserve as per AS 10. Depreciation to the extent of Rs. 63,38,535/- (Previous Year Rs. 48,40,175/-). has been adjusted against revaluation reserve during the current year and credited to General Reserves.

b. Depreciation is provided on Fixed Assets as per Schedule II of the Companies Act 2013, accordingly an amount of Rs.18,22,616/- is charged from opening reserves for the assets which are in existence beyond useful life as on 01-042014.

7. Employee Benefits:

Disclosures in terms of AS-15 are under:

a. Defined contribution plan:

Contribution to defined contribution plan recognized as expenses for the year 2014-2015 is Employers contribution to Provident Fund and ESI Rs.16,41,684/-.

b. Defined Benefit Plan:

As per the explanations given by the management of the company except for Gratuity, there are no other benefit plans for the employees of the company. The present value of Gratuity obligation is determined during this year (2014-2015) based on actuarial valuation using the projected unit credit method. Accordingly provision of Rs.17,476/-has been made in the year 2014-2015. (Previous year - Rs.3,61,011/-)

8. Deferred Taxes:

Based on the petition filed by the company on 21-04-2008, the Hon'ble High Court of Madras has allowed the company on 19-08-2008 to utilize the Securities Premium account towards the Deferred Tax Liability computed as per Accounting Standard 22 issued by the Institute of Chartered Accountants of India.

9. Disclosures of Trade payable under current/ noncurrent liabilities is based on the information available with the company regarding the status of the suppliers as defined under the "Micro, Small and Medium Enterprises Development Act, 2006" (the Act). There are no delays in payment made to such suppliers and there is no overdue amount outstanding as at the Balance Sheet date. Based on the above the relevant disclosure u/s. 22 of the said Act is as follows:

Particulars Amount in Rs.)

Principal amount outstanding at the end of the year -

Interest amount due at the end of the year -

Interest paid to suppliers -

10. 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.

11. Remittance in Foreign Currency towards Dividend - Nil

12. Earnings in Foreign Currency Rs. Nil (Previous year Rs. Nil)

28. The application relating to waiver of remuneration in excess of section 309(5B) of the Companies Act, 1956 for the year 2012-13 & 2013-14 has been rejected by the Central Government, accordingly an amount of Rs.12,00,000/- has been reversed from the Directors Remuneration account. Amount debited to the statement of profit and loss Rs.16,00,000/- is net of the above said recovery.

13. RELATED PARTY DISCLOSURES:

List of parties where control exists

a) Associates:

1. OPG Energy Private Limited

2. Gita Renewable Energy Limited

3. OPG Renewable Energy Private Limited

b) Other related parties:

1. Sonal Vyapar Limited

2. OPG Business Centre Private Ltd

3. Chennai Ferrous Industries Limited

4. Indian Corporate Business Centre Limited

5. Kanishk Metal Recycling Pvt ltd

6. OM Power Sakthi India Pvt Ltd

7. Sri Sri Rukmani Rolling Mill Private Limited

8. OM Energy Generation Private Limited

Key Management Personnel (KMP):

Mr. Ravi Kumar Gupta, Chairman & Managing Director

Mr. Vishal Keyal, Whole Time Director & Chief Financial Officer

Mr. Kanishk Gupta, Director

Notes:

1. Remuneration to key management personnel is Rs.28,00,000/-

2. Sitting Fees to Directors Rs.50,000/-

3. Related party relationship is as identified by the company and relied upon by the Auditors.

31. Disclosure of loans and advances as per the requirement of clause 32 of the listing agreement with Stock Exchanges in India.

i) The company does not have any subsidiary and has not given any loans and advances in the nature of loans to its associates.

ii) No Interest free loans have been given to its employees.

14. PREVIOUS YEAR FIGURES:

Previous year's / figures have been regrouped and rearranged wherever necessary.

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Mar 31, 2014

1. CORPORATE INFORMATION

Kanishk Steel Industries Limited (the company) incorporated under the Companies Act, 1956, in the year 1989, is engaged in the manufacture and supply of iron and steel products. The company''s shares are listed on the Bombay Stock Exchange Limited and the shares are traded regularly.

2. LONG TERM BORROWINGS

Terms of Repayment and rate of interest:

HP Loan of Rs.1,199,000/- is repayable in 24 monthly instalments of Rs.55,605/- each and it carries an interest @ 10.50% p.a.

HP Loan of Rs.1,070,000/- is repayable in 24 monthly instalments of Rs. 49,622/- each and it carries an interest @ 10.50% p.a.

HP Loan of Rs.17,450,000/- is repayable in 24 monthly instalments of Rs. 817,400 each and it carries an interest @ 11.67 % p.a.

Security :

Secured HP Loans from Bank / Financial Institutions are secured by the respective vehicles and machinery.

3. ADDITIONAL INFORMATION TO THE FINANCIAL STATEMENTS

i) Contingent liability not provided for:

(a) Counter Guarantees furnished to the bank Rs. 1,04,37,200/- (Previous year Rs.5,00,000/-)

(b) Towards outstanding Letter of Credit Rs. 25,45,74,922/- (Previous year Rs.7,03,41,723/-) on account of import of raw materials.

ii) Estimated amount of contracts remaining to be executed on capital accounts and not provided for Rs. Nil (Previous year Rs. Nil pertaining to resulting company) and for others is nil.

iii) Claims against the company not acknowledged as debt:

a) towards the disallowance of deemed Credit to the extent of Rs.2,34,094/- under Rule 57-I of the Central Excise Rules, 1944 read with Section 11-A of Central Excise Act, 1944 made on the erstwhile Avanti Oil and Steel Industries Private Limited, the transferor company. Matter under appeal before the Commissioner of Central Excise (Appeals) Chennai.

b) towards the demand of Rs.35,66,000/- plus penalty of an equal amount plus interest thereon for re-fixation of Annual Capacity of Production (ACP) by the Commissioner of Central Excise on the erstwhile O.P.Steels Limited, the transferor company. Company has filed stay petition. This matter is pending before Honb''le High Court of Madras.

c) towards the demand of differential duty of Rs.52,38,000/- (Rs.87,25,000/- less Rs.34,87,000/- already paid) plus interest and penalty as per the provisions of the Central Excise Act, 1944 as per the show cause notice no:2/06 dated 17-1-2006 issued by the Commissioner of Central Excise, Chennai claiming wrong adoption of assessable value for the excisable goods cleared from factory to depots. Company has won the appeal before the settlement commission. The Central Excise Department has filed an appeal in the Hon''ble High Court of Madras against the order of the settlement commission.

d) towards the demand of Rs 9,00,000/- plus penalty of an equal amount plus interest thereon for re-fixation of Annual Capacity of Production (ACP) by the Commissioner of Central Excise. The department has filed its appeal against this company. This matter is pending before Hon''able High Court of Madras.

e) towards the demand of Central Excise duty of Rs.69,06,945/- plus equal amount of penalty plus interest of Rs.50,12,040/- plus fine of Rs.5,00,000/- (total demand Rs.19,325,930/- and Rs.1,36,45,721/- paid there-against) - matter under appeal with CESTAT, Chennai.

iv) Revaluation of Fixed Assets:

Fixed Assets pertaining to Rolling Division of the Company have been revalued on 31.03.2008, corresponding credit given to the Revaluation Reserve as per AS 10. Depreciation to the extent of Rs. 48,40,175/- has been adjusted against revaluation reserve during the current year (Previous Year Rs. 48,40,175/-).

v) Employee Benefits:

Disclosures in terms of AS-15 are under:

a. Defined contribution plan:

Contribution to defined contribution plan recognized as expenses for the year 2013-14 is Employers contribution to Provident Fund and ESI Rs.18,18,950/-.

b. Defined Benefit Plan:

As per the explanations given by the management of the company except for Gratuity, there are no other benefit plans for the employees of the company. The present value of Gratuity obligation is determined during this year (2013-2014) based on actuarial valuation using the projected unit credit method. Accordingly provision of Rs. 3,61,011/- has been made in the year 2013-14. (2012-13 is Rs. 4,19,912/-)

vi) Deferred Taxes:

Based on the petition filed by the company on 21.04.2008, the Hon''ble High Court of Madras has allowed the company on 19.08.2008 to utilize the Securities Premium account towards the Deferred Tax Liability computed as per Accounting Standard 22 issued by the Institute of Chartered Accountants of India.

vii) Disclosures of Trade payable under current/ noncurrent liabilities is based on the information available with the company regarding the status of the suppliers as defined under the "Micro, Small and Medium Enterprises Development Act, 2006" (the Act). There are no delays in payment made to such suppliers and there is no overdue amount outstanding as at the Balance Sheet date. Based on the above the relevant disclosure u/s. 22 of the Act are as follows:

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

xi) Remittance in Foreign Currency towards Dividend - Nil

xii) Earnings in Foreign Currency Rs. Nil (Previous year Rs. Nil)

4. Remuneration of Rs.40,00,000/- paid to the Managing Director / Director and debited to the Statement of Profit and Loss for the financial year 2013-14 includes Rs. 6,00,000/- in excess of the limits specified in Section 309 of the Companies Act, 1956. The excess payment is as a result of lower profits in the wake of adverse market conditions. The Company is in the process of making application to Central Government u/s 309(5B) of the Companies Act, 1956 to waive the recovery of the said excess remuneration. Pending such approval the Managing Director holds the excess remuneration paid in trust for the Company.

5. RELATED PARTY DISCLOSURES:

Enterprises:

OPG Energy Private Limited OPG Renewable Energy Private Limited

OM Energy Generation Private Sonal Vyapar Limited Limited

Salem Food Products Limited Durga Rubber Works

OPG Business Centre Private Ltd Gita Renewable Energy Ltd

Chennai Ferrous Industries Limited Sri Sri Rukmani Rolling Mill Private Limited

Indian Corporate Business Centre Primex Infrastructure Private Limited Limited

Kanishk Metal Recycling Private Limited

Relationship: Enterprises in which key management personnel are having significant influence.

Key Management Personnel:

Mr. Ravi Kumar Gupta Chairman & Managing Director Mr. Vishal Keyal Whole-time Director Mr. Kanishk Gupta Director

6. Disclosure of loans and advances as per the requirement of clause 32 of the listing agreement with stock Exchanges in India.

a) The company does not have any subsidiary and has not given any loans and advances in the nature of loans to its associates.

b) No Interest free loans have been given to its employees.

7. PREVIOUS YEAR FIGURES

Previous year''s figures have been regrouped and rearranged wherever necessary.

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Mar 31, 2013

1. CORPORATE INFORMATION

Kanishk Steel Industries Limited was incorporated under the Companies Act, 1956, in the year of 1989 and carried out the business activities as follows:

- Manufacture of Steel and Allied Products (Rolling Division and Sponge Iron Division)

- Generation of power (Power Division)

Pursuant to the Scheme of Arrangement (Demerger) approved by the Honourable High Court of Madras under Sections 391 to 394 of the Companies Act, 1956, the Company transferred all the assets and liabilities of the Power Division and Sponge Iron Division of the Company into Gita Renewable Energy Limited and Chennai Ferrous Industries Limited respectively at their respective book values and on a going concern basis.

Presently the Company operates the Rolling Division only. The shares of the Company are traded at Bombay Stock Exchange regularly.

2. ADDITIONAL INFORMATION TO THE FINANCIAL STATEMENTS

i) Contingent liability not provided for:

(a) Counter Guarantees furnished to the bank Rs. 70,341,723/- (Previous year Rs. 21,711,900/-)

(b) Towards outstanding Letter of Credit Rs. 500,000 /- (Previous year Rs. 139,308,804/-) on account of import of raw materials.

ii) Estimated amount of contracts remaining to be executed on capital accounts and not provided for Rs. Nil (Previous year Rs. 135,900,000 pertaining to resulting company) and for others is nil.

iii) Claims against the company not acknowledged as debt:

a) towards the disallowance of deemed Credit to extent of Rs. 234,094/- under Rule 57-I of the Central Excise Rules, 1944 read with Section 11-A of Central Excise Act, 1944 made on the erstwhile Avanti Oil and Steel Industries Private Limited, the transferor company. Matter under appeal before Commissioner of Central Excise (Appeals), Chennai.

b) towards the demand of Rs. 3,566,000/- plus penalty of an equal amount plus interest thereon for re-fixation of Annual Capacity of Production (ACP) by the Commissioner of Central Excise on the erstwhile OP Steels Limited, the transferor company. Company has filed stay petition. This matter is pending before Honb''le High Court of Madras.

c) towards the demand of differential duty of Rs. 5,238,000/- (Rs.8,725,000/- less Rs.3,487,000/- already paid) plus interest and penalty as per the provisions of the Central Excise Act, 1944 as per the show cause notice No. 2/06 dated 17-1-2006 issued by the Commissioner of Central Excise, Chennai claiming wrong adoption of assessable value for the excisable goods cleared from factory to depots. Company has won during the year its appeal before the settlement commission and the matter has been referred to Hon''ble High Court of Madras by the Commissioner of Central Excise.

d) towards the demand of Rs. 900,000/- plus penalty of an equal amount plus interest thereon for re-fixation of Annual Capacity of Production (ACP) by the Commissioner of Central Excise. The department has filled its appeal against this company. This matter is pending before Hon''able High Court of Madras.

iv) Revaluation of Fixed Assets:

Fixed Assets pertaining to Rolling Division of the Company have been revalued on 31.03.2008, corresponding credit given to the Revaluation Reserve as per AS 10. Depreciation to the extent of Rs. 4,840,175/- has been adjusted against revaluation reserve during the current year (Previous Year Rs. 4,840,175/-).

v) Employee Benefits:

Disclosures in terms of AS-15 are under:

a. Defined contribution plan:

Contribution to defined contribution plan recognized as expenses for the year 2012-2013 is Employers contribution to Provident Fund and ESI Rs.1,426,133/-.

b. Defined Benefit Plan:

As per the explanations given by the management of the company except for Gratuity, there are no other benefit plans for the employees of the company. The present value of Gratuity obligation is determined during this year (2012-13) based on actuarial valuation using the projected unit credit method. Accordingly provision of Rs. 419,912/- has been made in the year 2012-13. (2011-12 is Rs. 850,800/-)

vi) Deferred Taxes:

Based on the petition filed by the company on 21.04.2008, the Hon''ble High Court of Madras has allowed the company on 19.08.2008 to utilize the Securities Premium account towards the Deferred Tax Liability computed as per Accounting Standard 22 issued by the Institute of Chartered Accountants of India.

vii) Disclosures of Trade payable under current/ noncurrent liabilities is based on the information available with the company regarding the status of the suppliers as defined under the Micro, Small and Medium Enterprises Development Act, 2006 (the Act). There are no delays in payment made to such suppliers and there is no overdue amount outstanding as at the Balance Sheet date. Based on the above the relevant disclosure under section 22 of the Act are as follows:

viii) 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.

xii) Earnings in Foreign Currency Rs. Nil (Previous year Rs. Nil)

xiii) Segment Information for the Year Ended 31st March, 2013:

Business Segment:

The Company operates in single Business Segment of ''Manufacturing of Steel and Allied Products''. 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.

3. Remuneration of Rs. 4,025,000/- paid to the Managing Director / Director and debited to the Statement of Profit and Loss for the financial year 2012-13 includes Rs. 600,000/- in excess of the limits specified in Section 309 of the Companies Act, 1956. The excess payment is as a result of lower profits in the wake of adverse market conditions. The Company is in the process of making application to Central Government u/s 309(5B) of the Companies Act, 1956 to waive the recovery of the said excess remuneration. Pending such approval the Managing Director holds the excess remuneration paid in trust for the Company.

4. RELATED PARTY DISCLOSURES: Enterprises:

OPG Energy Private Limited

OPG Renewable Energy Private Limited

OM Energy Generation Private Limited

Sonal Vyapar Limited

Salem Food Products limited

Durga Rubber Works

OPG Business Centre Private Ltd

Gita Renewable Energy Pvt Ltd

Chennai Ferrous Industries Limited

Sri Sri Rukmani Rolling Mill Private Limited

Indian Corporate Business Centre Limited

Primex Infrastructure Private Limited

Relationship: Enterprises in which key management personnel are having significant influence.

Key Management Personnel:

Mr. Ravi Kumar Gupta Chairman & Managing Director

Mr. Vishal Keyal Whole-time Director.

Mr. Kanishk Gupta Director

5. SCHEME OF ARRANGEMENT

a) Pursuant to the Scheme of Arrangement ("the Scheme") approved by the Hon''ble High Court of Madras, all the assets and liabilities of the Power Division and Sponge Iron Division of the Company have been vested with Gita Renewable Energy Limited and Chennai Ferrous Industries Limited respectively at their respective book values and on a going concern basis from 1st July 2010.

b) As per the scheme, appointed date as approved by the Hon''ble High Court of Madras is 1st July 2010 and the effective date is 28th February, 2013 being the date on which the certified copy of the order sanctioning the said Scheme was filed with Registrar of Companies, Chennai in accordance with Companies act, 1956.

c) Details of assets and liabilities transferred to the Resulting company are as under:

5. Disclosure of loans and advances as per the requirement of clause 32 of the listing agreement with stock Exchanges in India.

a) The company does not have any subsidiary and has not given any loans and advances in the nature of loans to its associates.

b) No Interest free loans have been given to its employees.

7. PREVIOUS YEAR FIGURES

a) Pursuant to the Clause 7.1 of the Scheme of Arrangement, all profits accruing or losses incurred including the effect of taxes relating to the Power Division and Sponge Iron Division, from the Appointed Date (1st July, 2010) until 31st March, 2012 are to be treated as Profits or Losses as the case may be of the respective Resulting Companies. This Clause has been given due effect in the audited accounts.

b) The figures for the year ended on 31st March, 2013 have been recast to give effect of the Scheme of Arrangement of the demerger of the Power Division and Sponge Iron Division.

c) Previous period figures have been regrouped wherever necessary. The results for the year ended on 31st March, 2012 being inclusive of results of Power Division and Sponge Iron Division of the Company, are not comparable with those of the same period of current year.

---

Mar 31, 2012

1. Corporate Information:

Kanishk Steel Industries (the company) incorporated under the Companies Act, 1956, in the year 1989, is engaged in the manufacture and supply of iron and steel products including Sponge iron and windmill power generation. The company's shares are listed on the Bombay Stock Exchange Limited and the shares are traded regularly.

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.

Terms of Repayment and rate of interest:

Rupee Term Loan of Rs.240,006,951/- is repayable in 28 quarterly instalments of Rs.8,572,000/- each and it carries an interest @ 12% p.a.

Security:

(Term Loans from Bank are secured by equitable mortgage of land and building including Plant and Machinery and also by hypothecation of Raw Materials, Stock-in-Process and Finished Goods, Corporate guarantee by M/s.Tamilnadu Property Developers Ltd and also personally guaranteed by the CMD of the company)

2. ADDITIONAL INFORMATION TO THE FINANCIAL STATEMENTS

i) Contingent liability not provided for:

a) Counter Guarantees furnished to the bank Rs. 21,711,900/- (Previous year Rs. 6,146,000/-)

b) Towards outstanding Letter of Credit Rs.139,308,804/- (Previous year Rs. 215,927,000/-) on account of import of raw materials.

ii) Estimated amount of contracts remaining to be executed on capital accounts and not provided for Rs.135,900,000/- (Previous year Rs.135,900,000/-) and for others is NIL.

iii) Claims against the company not acknowledged as debt:

a) -towards the disallowance of deemed Credit to extent of Rs.234,094/- under Rule 57-I of the Central Excise Rules, 1944 read with Section 11-A of Central Excise Act, 1944 made on the erstwhile Avanti Oil and Steel Industries Private Limited, the transferor company. Matter under appeal before Commissioner of Central Excise (Appeals) Chennai.

b) - towards the demand of Rs.3,566,000/- plus penalty of an equal amount plus interest thereon for re-fixation of Annual Capacity of Production (ACP) by the Commissioner of Central Excise on the erstwhile OP Steels Limited, the transferor company. Company has filed stay petition. This matter is pending before Honb'le High Court of Madras.

c) -towards the demand of differential duty of Rs.5,238,000/- (Rs.8,725,000/- less Rs.3,487,000/- already paid) plus interest and penalty as per the provisions of the Central Excise Act, 1944 as per the show cause notice no:2/06 dated 17.01.2006 issued by the Commissioner of Central Excise, Chennai claiming wrong adoption of assessable value for the excisable goods cleared from factory to depots. Company has won during the year its appeal before the settlement commission and the matter has been referred to Hon'ble High Court of Madras by the Commissioner of Central Excise.

d) - towards the demand of Rs. 900,000/- plus penalty of an equal amount plus interest thereon for re-fixation of Annual Capacity of Production(ACP) by the Commissioner of Central Excise. The department has filled its appeal against this company. This matter is pending before Hon'able High Court of Madras.

iv) Revaluation of Fixed Assets:

Fixed Assets pertaining to Rolling Division of the Company have been revalued on 31.03.2008, corresponding credit given to the Revaluation Reserve as per AS 10. Depreciation to the extent of Rs. 4,840,175/- has been adjusted against revaluation reserve during the current year(Previous Year Rs. 4,840,175/-).

v) License Agreement:

Company has entered into a License Agreement on 26.04.2008 to give on License the 10MW Power Plant to OPG Renewable Energy Private Limited (OPGREPL) on the understanding that OPGREPL shall provide power to the Company upto 9 Million units every year. It has

also been undertaken that in the event of shortfall, OPGREPL shall compensate the company by an amount equal to the value of such shortfall calculated by applying the rate of power charged by TNEB in that financial year. An interest free deposit of Rs.334,800,000/- had been given by OPGREPL upto the financial year 2010-2011. and the commitment has accordingly been reduced to 1 million units a year w.e.f. 01.04.2011. During the year 2011-2012, additional deposit of Rs.105,000,000/- has been given by the OPGREPL, accordingly unsecured loans are increased to Rs.439,770,000/-.

vi) Employee Benefits:

Disclosures in terms of AS-15 are as under:

a. Defined contribution plan:

Contribution to defined contribution plan recognized as expenses for the year 2011-2012 is Employers contribution to Provident Fund and ESI Rs.1,525,759/-.

b. Defined Benefit Plan:

As per the explanations given by the management of the company except for Gratuity, there are no other benefit plans for the employees of the company. The present value of Gratuity obligation is determined during this year (2011-2012) based on actuarial valuation using the projected unit credit method. Accordingly provision of Rs. 850,800/- has been made in the year 2011-2012. (2010-2011 Rs. 709,000/-)

vii) Deferred Taxes:

Based on the petition filed by the company on 21.04.2008, the Hon'ble High Court of Madras has allowed the company on 19.08.2008 to utilize the Securities Premium account towards the Deferred Tax Liability computed as per Accounting Standard 22 issued by the Institute of Chartered Accountants of India.

(No adjustments have been done in Securities Premium account since there is no additional liability towards deferred taxes during the year)

viii) Disclosures of Trade payable under current/ noncurrent liabilities is based on the information available with the company regarding the status of the suppliers as defined under the “Micro, Small and Medium Enterprises Development Act, 2006” (the Act). There are no delays in payment made to such suppliers and there is no overdue amount outstanding as at the Balance Sheet date. Based on the above the relevant disclosure u/s. 22 of the Act are as follows:

ix) 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.

x) The value of the surety given by the company to the Customs Authorities on behalf of M/s OPG Energy Private Ltd. (OPGEL) to the extent of Rs.46,141,000/- with a commitment of Export obligation for US $ 79,63,973.76 within 8 years from 3.11.2003 for OPGEL to avail concessional customs duty for import of capital equipment. As per the arrangement, OPGEL will compensate the company with a total amount of Rs.38,641,000/- towards the saving based on progress achieved in the export obligations guaranteed by the Company and the joint venture partners on behalf of OPGEL within the stipulated period, out of which Rs. 7,805,488/- income received during the year. Accordingly the company has fulfilled its obligation during the year.

Type of products and services in each business segment: Steel - Manufacture and Trading of rolled steel products. Power - Generation and captive consumption of power.

3. RELATED PARTY DISCLOSURES:

Enterprises:

OPG Energy Private Limited

OPG Renewable Energy Private Limited

OM Energy Generation Private Limited

Sonal Vyapar Limited

Salem Food Products limited

Durga Rubber Works

OPG Business Centre Private Ltd

Gita Renewable Energy Pvt Ltd

Chennai Ferrous Industries Limited

Sri Sri Rukmani Rolling Mill Private Limited

Indian Corporate Business Centre Limited

Primex Infrastructure Private Limited

Notes:

a). Remuneration to key management personnel is disclosed in the notes attached to and forming part of accounts.

b). Sitting Fees to Directors Rs.28,000/-

c). Related party relationship is as identified by the company and relied upon by the Auditors.

4. DISCLOSURE OF LOANS AND ADVANCES:

(as per the requirement of clause 32 of the listing agreement with stock Exchanges in India)

i) The company does not have any subsidiary and has not given any loans and advances in the nature of loans to its associates.

ii) No Interest free loans been given to its employees.

5. PREVIOUS YEAR FIGURES:

Till the year ended 31st March 2011, the company was using pre-revised Schedule VI to the companies Act, 1956 for preparation and presentation of its financial statements. During the year ended 31st March 2012, the revised Schedule VI notified under the Companies Act, 1956, has become applicable to the company, accordingly previous year's figures have been re grouped / rearranged wherever necessary.

---

Mar 31, 2010

1. Contingent liability not provided for:

a) Counter Guarantees furnished to the bank Rs. 56.74 Lakhs (Previous year Rs. 99.58 Lakhs)

(b) Towards outstanding Letter of Credit Rs. 2804.90 Lakhs (Previous year Rs. Nil) on account of import of raw materials.

2. Estimated amount of contracts remaining to be executed on capital accounts and not provided for Rs.1359 Lacs. (Previous year: Rs. NIL).

3. claims against the company not acknowledged as debt:

a) - towards the disallowance of deemed Credit to extent of Rs.2,34,094/- under Rule 57-I of the Central Excise Rules, 1944 read with Section 11-A of Central Excise Act, 1944 made on the erstwhile Avanti oil and Steel Industries Private Limited, the transferor company. Matter under appeal before Commissioner of Central Excise (Appeals) Chennai.

b) - towards the demand of Rs.35.66 lakhs plus penalty of an equal amount plus interest thereon for re-fxation of Annual Capacity of Production (ACP) by the Commissioner of Central Excise on the erstwhile OP Steels Limited, the transferor company. Company has fled stay petition. This matter is pending before Honb’le High Court of Madras.

c) - towards the demand of differential duty of Rs.52.38 lakhs (Rs.87.25 lakhs less Rs.34.87 lakhs already paid) plus interest and penalty as per the provisions of the Central Excise Act, 1944 as per the show cause notice no:2/06 dated 17-1-2006 issued by the Commissioner of Central Excise, Chennai claiming wrong adoption of assessable value for the excisable goods cleared from factory to depots. Company has won during the year its appeal before the settlement commission and the matter has been referred to Hon’ble High Court of Madras by the Commissioner of Central Excise- towards the disallowance of Cenvat Credit relating to the Furnace oil to extent of Rs. 17,99,434/- plus penalty of an equal amount imposed by the Central excise Dept. Matter pending before Hon’ble High Court of Madras.

4. revaluation of fixed assets:

Fixed Assets pertaining to Rolling Division of the Company have been revalued on 31.3.08, corresponding credit given to the Revaluation Reserve as per AS 10. Depreciation to the extent of Rs. 48.01 Lakhs has been adjusted against revaluation reserve during the current year.

5. License agreement:

Company has entered into a License Agreement on 26th April 2008 to give on License the 10MW Power Plant to oPG Renewable Energy Private Limited (oPGREPL) on the understanding that oPGREPL shall provide power to the Company upto 9 Million units every year. It has also been undertaken that in the event of shortfall, oPGREPL shall compensate the company by an amount equal to the value of such shortfall calculated by applying the rate of power charged by TNEB in that fnancial year. An interest free deposit of Rs.23.98 Crores has been given by OPGREPL during 2008-09 and the commitment has accordingly been halved to 4.5 million units a year w.e.f. 1-4-09

6. Employee Benefits

Disclosures in terms of AS-15 are under:

a. Defined contribution plan:

Contribution to defined contribution plan recognized as expenses for the year 2009-10 is Employers contribution to Provident Fund and ESI Rs.14.21 Lakhs.

b. Defined Benefit Plan:

As per the explanations given by the management of the company except for Gratuity, there are no other Benefit plans for the employees of the company. The present value of Gratuity obligation is determined during this year (2009-10) based on actuarial valuation using the projected unit credit method. Accordingly provision of Rs. 1.57 Lacs has been made in the year 2009-10. (2008-09 Rs. 2.12 Lacs)

8. Deferred Taxes:

Based on the petition fled by the company on 21st April 2008, the Hon’ble High Court of Madras has allowed the company on 19th August 2008 to utilize the Securities Premium account towards the Deferred Tax Liability computed as per Accounting Standard 22 issued by the Institute of Chartered Accountants of India.

Deferred Tax Liability for the year Rs.66,78,559

Deferred Tax Liability adjusted against Securities Premium account

(As per Directives of Hon’ble High Court Madras) Rs.66,78,559

Balance Deferred Tax Liability debited to Profit & Loss Account Rs.NIL

9. Derivatives

The Company has recognized Rs 4.15 Lacs as income from derivative transaction (commodity Exchange contracts).

10. There were no amounts overdue (above Rs.1 lakh) to Small Scale and/or Ancillary Industrial Suppliers on account of Principal and/or Interest as at 31.03.2010. This disclosure is based on the information available with the Company regarding the status of the suppliers.

11. Company has circularized/sought confrmation of balance letters to/from sundry debtors & advance parties / sundry creditors. In the absence of negation, the balances appearing the books are taken as confrmed.

12. Sundry creditors include an amount of Rs. 78.05 lakhs being the value of the surety given by the company to the Customs Authorities on behalf of M/s oPG Energy Private Ltd. (oPGEL) to the extent of Rs.461.41 lakhs with a commitment of Export obligation for US$ 79,63,973.76 within 8 years from 3.11.2003 for oPGEL to avail concessional customs duty for import of capital equipment. As per the arrangement, oPGEL will compensate the company with a total amount of Rs.386.41 lakhs towards the saving based on progress achieved in the export obligations guaranteed by the Company and the joint venture partners on behalf of oPGEL within the stipulated period, out of which Rs.23.59 lakhs income received during the year.

13. Additional information pursuant to the provisions of paragraphs 3, 4-C, 4-D of Part II of Schedule VI of the Companies Act, 1956.

Licensed and Installed capacity (As certifed by the Management)

Name of the Products manufactured:

i) Tor Steel & Profles

ii) Windmill Power Generation.

iii) Sponge Iron

Licensed Capacity Not applicable.

Installed Capacity

1) Tor Steel and Profles: 60,000 M T /p a

2) Wind Power: 7.610 MW

3) Sponge Iron: 60000 M T / p a

14. Previous year figures are regrouped / rearranged wherever necessary.

15. SEGMENT INFoRMATIoN FoR THE YEAR ENDED 31st March 2010.

(16) Related Party Disclosures: related Parties enterprises

1. OPG Energy Private Limited

2. The South India Steel & Starch Industries

3. OPG Renewable Energy Private Limited (oPGREPL)*

4. OM Energy Generation Private Limited

5. OPG Infotech Private Limited

6. Sonal Vyapar Limited

7. Salem Food Products limited

8. South India Steel & Starch Industries

9. Durga Rubber Works

10. ICBC Holding

There are no commercial transactions with any of the related party except for oPG Energy

Private Limited during the year 2009-10.

Relationship: Enterprises in which key management personnel are having signifcant infuence.

key management Personnel:

Mr. Ravi Gupta Chairman & Managing Director

Mr.Ashok Bohra Whole Time Director.

---

Mar 31, 2009

1. Contingent liability not provided for:

(a) Counter Guarantees furnished to the bank Rs.99.58 Lakhs (Previous year Rs. 97.91 Lakhs)

(b) Towards outstanding Letter of Credit Rs. NIL (Previous year Rs. 2893.19 Lakhs) on account of import of raw materials.

2. Estimated amount of contracts remaining to be executed on capital accounts and not provided for Rs. NIL (Previous year: Rs. 7.85 Crores).

3. Claims against the company not acknowledged as debt:

a) - towards the disallowance of deemed Credit to extent of Rs.2,34,094/- under Rule 57-1 of the Central Excise Rules, 1944 read with Section 11-A of Central Excise Act, 1944 made on the erstwhile Avanti Oil and Steel Industries Private Limited, the transferor company. Matter under appeal before Commissioner of Central Excise (Appeals) Chennai.

b) - towards the demand of Rs.35.66 lakhs plus penalty of an equal amount plus interest thereon for re-fixation of Annual Capacity of Production (ACP) by the Commissioner of Central Excise on the erstwhile OP Steels Limited, the transferor company. Company has filed stay petition. This matter is pending before Honble High Court of Madras.

c) - towards the demand of penalty of Rs.11,000/- imposed by Central Excise Authorities relating to difference in the mode of valuation of Sponge Iron cleared on job work basis. Company has filed a stay application and the matter is pending before Commissioner of Central Excise (Appeals) Chennai.

d) -towards the demand of differential duty of Rs.52.38 lakhs (Rs.87.25 lakhs less Rs.34.87 lakhs already paid) plus interest and penalty as per the provisions of the Central Excise Act, 1944 as per the show cause notice no:2/06 dated 17-1-2006 issued by the Commissioner of Central Excise, Chennai claiming wrong adoption of assessable value for the excisable goods cleared from factory to depots. Company has won during the year its appeal before the settlement commission and the matter has been referred to Honble High Court of Madras by the Commissioner of Central Excise

e) - towards the disallowance of Cenvat Credit relating to the Furnace Oil to extent of Rs. 17,99,434/- plus penalty of an equal amount imposed by the Central excise Dept. Matter pending before Honble High Court of Madras.

4. Revaluation of Fixed Assets:

Fixed Assets pertaining to Rolling Division of the Company have been revalued on 31.3.08, corresponding credit given to the Revaluation Reserve as per AS 10. Depreciation to the extent of Rs.48.40 Lakhs has been adjusted against revaluation reserve during the current year.

5. License Agreement:

Company has entered into a License Agreement on 26th April 2008 to give on License the 10MW Power Plant to OPG Renewable Energy Private Limited (OPGREPL) on the understanding that OPGREPL shall provide power to the Company upto 9 Million units every year. It has also been undertaken that in the event of shortfall, OPGREPL shall compensate the company by an amount equal to the value of such shortfall calculated by applying the rate of power charged by TNEB in that financial year. An interest free deposit of Rs.20 Crores has been given by OPGREPL during the year and the commitment has accordingly been halved to 4.5 million units a year w.e.f. 1-4- 09.

6. Employee Benefits

Disclosures in terms of AS-15 are under:

a. Defined contribution plan:

Contribution to defined contribution plan recognized as expenses for the year 2008-09 is Employers contribution to Provident Fund and ESI Rs. 13.02 Lakhs.

b. Defined Benefit Plan:

As per the explanations given by the management of the company except for Gratuity, there are no other benefit plans for the employees of the company. The present value of Gratuity obligation is determined during this year (2008-09) based on actuarial valuation using the projected unit credit method. Accordingly provision of Rs.2.12 Lacs has been made in the year 2008-09. (2007-08 Rs. 12.96 Lacs)

7. Deferred Taxes:

Based on the petition filed by the company on 21st April 2008, the Honble High Court of Madras has allowed the company on 19th August 2008 to utilize the Securities Premium account towards the Deferred Tax Liability computed as per Accounting Standard 22 issued by the Institute of Chartered Accountants of India.

8. There were no amounts overdue (above Rs.1 lakh) to Small Scale and/or Ancillary Industrial Suppliers on account of Principal and/or Interest as at 31.03.2009. This disclosure is based on the information available with the Company regarding the status of the suppliers.

9. 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.

10. Sundry creditors include an amount of Rs.101.65 lakhs being the value of the surety given by the company to the Customs Authorities on behalf of M/s OPG Energy Private Ltd. (OPGEL) to the extent of Rs.461.41 lakhs with a commitment of Export obligation for US$ 79,63,973.76 within 8 years from 3.11.2003 for OPGEL to avail concessional customs duty for import of capital equipment. As per the arrangement, OPGEL will compensate the company with a total amount of Rs.386.41 lakhs towards the saving based on progress achieved in the export obligations guaranteed by the Company and the joint venture partners on behalf of OPGEL within the stipulated period, out of which Rs. 100.70 lakhs income received during the year.

11. Previous year figures are regrouped / rearranged wherever necessary.

---

Mar 31, 2000

1. Estimated amount of contracts remaining to be executed on capital account and not provided for is Rs. nil lakhs (Previous Year - Nil)

2. Contingent liability not provided for:

(a) Counter Guarantees furnished to the bank Rs. 50.00 Lakhs (Previous year Rs. 180.24 Lakhs).

(b) Towards outstanding Letter of Credit Rs. 106.70 Lakhs (Previous year Rs. 85.27 Lakhs).

3. Claims against the company not acknowledged as debt NIL (Previous year NIL).

4. Previous period figures are regrouped / rearranged wherever necessary to conform to the current year layout of accounts and are not strictly comparable with the previous period figures which covered a period of 18 months.

5. Remuneration to the Directors:

Ravi Gupta, CMD 1,80,000

Rajesh Gupta, JMD 1,20,000

Total 3,00,000

6. There were no amounts overdue (above Rs.1 lakh) to small scale and/or ancillary industrial suppliers on account of principal and/or interest as at 31.03,2000. This disclosure is based on the information available with the company regarding the status of the suppliers.

7. No provision for dividend has been made on the 3000, 15% Cumulative Preference Shares of Rs.100/- each during the period.

8. Additional information pursuant to the provisions of paragraphs 3,4c,3,4d of Part II of Schedule VI of the Companies Act, 1956.

Name of the Product manufactured Tor steel and Profiles.

Licenced Capacity Not applicable.

Installed Capacity 50,000 Metric Tonnes