Notes to Accounts of Shah Alloys Ltd.

Mar 31, 2024

1.16 PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS:

i) Provisions are made when (a) the Company has a present legal or constructive obligation as a result of past events; (b) it

is probable that an outflow of resources embodying economic benefits will be required to settle the obligation; and (c) a

reliable estimate is made of the amount of the obligation.

ii) Contingent liabilities are not provided for but are disclosed by way of Notes on Accounts. Contingent liabilities are disclosed

in case of a present obligation from past events (a) when it is not probable that an outflow of resources will be required to

settle the obligation;(b) when no reliable estimate is possible;(c) unless the probability of outflow of resources is remote.

iii) Contingent assets are not accounted but disclosed by way of Notes on Accounts where the inflow of economic benefits is probable.

1.17 CURRENT AND NON-CURRENT CLASSIFICATION:

i) The Normal Operating Cycle for the Company has been assumed to be of twelve months for classification of its various assets and liabilities into "Current" and "Non-Current".

ii) The Company presents assets and liabilities in the balance sheet based on current and non-current classification.

iii) An asset is current when it is (a) expected to be realized or intended to be sold or consumed in normal operating cycle; (b) held primarily for the purpose of trading; (c) expected to be realized within twelve months after the reporting period; (d) Cash and cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period. All other assets are classified as non-current.

iv) An liability is current when (a) it is expected to be settled in normal operating cycle; (b) it is held primarily for the purpose of trading; (c) it is due to be discharged within twelve months after the reporting period; (d) there is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period. All other liabilities are classified as non-current.

1.18 RELATED PARTY TRANSACTIONS:

i) A related party is a person or entity that is related to the reporting entity preparing its financial statements

(a) A person or a close member of that person''s family is related to reporting entity if that person;

(i) Has control or joint control of the reporting entity;

(ii) Has significant influence over the reporting entity; or

(iii) Is a member of the key management personnel of the reporting entity or of a parent of the reporting entity.

(b) An entity is related to a reporting entity if any of the following conditions applies;

(i) the entity and the reporting entity are members of the same group (which means that each parent, subsidiary and fellow subsidiary is related to the others);

(ii) One entity is an associate or joint venture of the other entity (or an associate or joint venture of a member of a group of which the other entity is a member);

(iii) Both entities are joint ventures of the same third party;

(iv) One entity is a joint venture of a third entity and the other entity is an associate of the third entity;

(v) The entity is a post-employment benefit plan for the benefit of employees of either the reporting entity or an entity related to the reporting entity;

(vi) The entity is controlled or jointly controlled by a person identified in (a);

(vii) A person identified in (a)

(i) Has significant influence over the entity or is a member of the key management personnel of the entity(or of a parent of the entity);

(viii) The entity, or any member of a group of which it is a part, provides key management personnel services to the reporting

entity or to the parent of the reporting entity.

ii) A related party transaction is a transfer of resources, services or obligations between a reporting entity and a related party, regardless of whether a price is charged.

Close members of the family of a person are those family members who may be expected to influence, or be influenced by, that person in their dealings with the entity.

Compensation includes all employee benefits i.e. all forms of consideration paid, payable or provided by the entity, or on behalf of the entity, in exchange for services rendered to the entity. It also includes such consideration paid on behalf of a parent of the entity in respect of the entity.

Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the entity, directly or indirectly, including any director (whether executive or otherwise) of that entity.

iii) Disclosure ofrelated party transactions as required by the accounting standard is furnished in the Notes on Financial Statements.

1.19 EARNINGS PER SHARE:

i) Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period.

ii) For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

1.20LEASE

The Company evaluates if an arrangement qualifies to be a lease as per the requirements of Ind AS 116. Identification of a lease requires significant judgment. The Company uses significant judgement in assessing the lease term (including anticipated renewals) and the applicable discount rate. The Company determines the lease term as the non-cancellable period of a lease, together with both periods covered by an option to extend the lease if the Company is reasonably certain to exercise that option; and periods covered by an option to terminate the lease if the Company is reasonably certain not to exercise that option. In assessing whether the Company is reasonably certain to exercise an option to extend a lease, or not to exercise an option to terminate a lease, it considers all relevant facts and circumstances that create an economic incentive for the Company to exercise the option to extend the lease, or not to exercise the option to terminate the lease. The Company revises the lease term if there is a change in the non-cancellable period of a lease.

1.21 CRITICAL ACCOUNTING JUDGMENTS, ASSUMPTIONS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

The preparation of the Standalone Financial Statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities at the date of the financial statements. Estimates and assumptions are continuously evaluated and are based on management''s experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

a) Judgments

In the process of applying the Company''s accounting policies, management has made the following judgements, which have the most significant effect on the amounts recognized in the standalone financial statements:

(i) Determination of Functional Currency

Currency of the primary economic environment in which the Company operates ("the functional currency") is Indian Rupee in lakhs (?) in which the company primarily generates and expends cash. Accordingly, the Management has assessed its functional currency to be Indian Rupee in lakhs ('').

(ii) Evaluation of Indicators for Impairment of Property, Plant and Equipment

The evaluation of applicability of indicators of impairment of assets requires assessment of external factors (significant decline asset''s value, significant changes in the technological, market, economic or legal environment, market interest rates etc.) and internal factors (obsolescence or physical damage of an asset, poor economic performance of the asset etc.) which could result in significant change in recoverable amount of the Property, Plant and Equipment.

b) Assumptions and Estimation Uncertainties

Information about estimates and assumptions that have the significant effect on recognition and measurement of assets, liabilities, income and expenses is provided below. Actual results may differ from these estimates.

(i) Taxes

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

The Company has carried forward loss on which deferred tax asset is created, based on probability that future profits will be available against which the deductible temporary difference can be realized.

(ii) Useful lives of Property, Plant and Equipment/Intangible Assets

Property, Plant and Equipment/ Intangible Assets are depreciated/amortised over their estimated useful lives, after taking into account estimated residual value. The useful lives and residual values are based on the Company''s historical experience with similar assets and taking into account anticipated technological changes or commercial obsolescence. Management reviews the estimated useful lives and residual values of the assets annually in order to determine the amount of depreciation/amortisation to be recorded during any reporting period. The depreciation/amortisation for future periods is revised, if there are significant changes from previous estimates and accordingly, the unamortised/ depreciable amount is charged over the remaining useful life of the assets.

(iii) Contingent Liabilities

In the normal course of business, Contingent Liabilities may arise from litigation and other claims against the company. Potential liabilities that are possible but not probable of crystallising or are very difficult to quantify reliably are treated as contingent liabilities. Such liabilities are disclosed in the Notes but are not recognised. Potential liabilities that are remote are neither recognised nor disclosed as contingent liability. The management decides whether the matters need to be classified as ''remote'', ''possible'' or ''probable'' based on expert advice, past judgements, experiences etc.

(iv) Evaluation of Indicators for Impairment of Property, Plant and Equipment

The evaluation of applicability of indicators of impairment of assets requires assessment of external factors (significant decline in asset''s value, economic or legal environment, market interest rates etc.) and internal factors (obsolescence or physical damage of an asset, poor economic performance of the idle assets etc.) which could result in significant change in recoverable amount of the Property, Plant and Equipment and such assessment is based on estimates, future plans as envisaged by the Group.

(v) Provisions

Provisions and liabilities are recognised in the period when it becomes probable that there will be a future outflow of funds resulting from past operations or events and the amount of cash outflow can be reliably estimated. The timing of recognition and quantification of the liability requires the application of judgement to existing facts and circumstances, which can be subject to change. The carrying amounts of provisions and liabilities are reviewed regularly and revised to take account of changing facts and circumstances.

1.22 INVESTMENTS

Investment in quoted equity shares are stated at its fair value through Profit and loss account.

31. FINANCIAL AND DERIVATIVE INSTRUMENTS Capital Management

The company''s objective when managing capital is to:

- Safeguard its ability to continue as a going concern so that the Company is able to provide maximum return to stakeholders and benefits for other stakeholders.

- Maintain an optimal capital structure to reduce the cost of capital.

The company''s Board of director''s reviews the capital structure on regular basis. As part of this review the board considers the cost of capital risk associated with each class of capital requirements and maintenance of adequate liquidity.

Disclosures

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, the 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 accounting policies as stated above

(ii) Fair Value Measurement

This note provides information about how the Company determines fair values of various financial assets.

Fair Value of financial assets and liabilities that are not measured at fair value (but fair value disclosures are required).

Management considers that the carrying amounts of financial assets and financial liabilities recognized in the financial statements approximate their fair values.

(iii) Financial Risk Management Objectives

While ensuring liquidity is sufficient to meet Company''s operational requirements, the Company''s financial management committee also monitors and manages key financial risks relating to the operations of the Company by analyzing exposures by degree and magnitude of risks. These risks include market risk (including currency risk and price risk), credit risk and liquidity risk.

Market Risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises two types of risk: interest rate, currency risk and other price risk, such as commodity price risk and equity price risk. Financial instruments affected by market risk include FVTPL investments, trade payables, trade receivables, etc.

Foreign Currency Risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company''s exposure to the risk of changes in foreign exchange rates relates primarily to the Company''s operating activities. The Company has a treasury department which monitors the foreign exchange fluctuations on the continuous basis and advises the management of any material adverse effect on the Company.

Interest Rate Risk

The Company''s interest rate risk arises from the Long-Term Borrowings with fixed rates. The Company''s fixed rates borrowings are carried at amortized cost.

Liquidity Risk

The Company manages liquidity risk by maintaining sufficient cash and cash equivalents including bank deposits and availability of funding through an adequate amount of committed credit facilities to meet the obligations when due.

Management monitors rolling forecasts of liquidity position and cash and cash equivalents on the basis of expected cash flows. In addition, liquidity management also involves projecting cash flows considering level of liquid assets necessary to meet obligations by matching the maturity profiles of financial assets & liabilities and monitoring balance sheet liquidity ratios.

The following tables detail the Company''s remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods. The information included in the tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company can be required to pay. The contractual maturity is based on the earliest date on which the Company may be required to pay.

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).

Trade Receivables

An impairment analysis is performed at each reporting date on an individual basis for all the customers. In addition, a large number of minor receivables are grouped into homogenous groups and assessed for impairment collectively. The maximum exposure to credit risk at the reporting date is the carrying value of trade receivables disclosed in Note 8 as the Company does not hold collateral as security. The Company has evaluated the concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions and industries.

(ii) Defined Benefit Plan: Retirement benefits in the form of Gratuity are considered as defined benefit obligation and are provided for on the basis of third-party actuarial valuation, using the projected unit credit method, as at the date of the Balance Sheet.

Every Employee who has completed five years or more of service is entitled to Gratuity on terms not less favorable than the provisions of The Payment of Gratuity Act, 1972.

As the Company has not funded its liability, it has nothing to disclose regarding plan assets and its reconciliation.

(iii) Major risk to the plan

I have outlined the following risks associated with the plan:

A. Actuarial Risk:

It is the risk that benefits will cost more than expected. This can arise due to one of the following reasons:

Adverse Salary Growth Experience: Salary hikes that are higher than the assumed salary escalation will result into an increase in Obligation at a rate that is higher than expected.

Variability in mortality rates: If actual mortality rates are higher than assumed mortality rate assumption than the Gratuity Benefits will be paid earlier than expected. Since there is no condition of vesting on the death benefit, the acceleration of cash flow will lead to an actuarial loss or gain depending on the relative values of the assumed salary growth and discount rate.

Variability in withdrawal rates: If actual withdrawal rates are higher than assumed withdrawal rate assumption than the Gratuity Benefits will be paid earlier than expected. The impact of this will depend on whether the benefits are vested as at the resignation date.

B. Investment Risk:

For funded plans that rely on insurers for managing the assets, the value of assets certified by the insurer may not be the fair value of instruments backing the liability. In such cases, the present value of the assets is independent of the future discount rate. This can result in wide fluctuations in the net liability or the funded status if there are significant changes in the discount rate during the inter-valuation period.

C. Liquidity Risk:

Employees with high salaries and long durations or those higher in hierarchy, accumulate significant level of benefits. If some of such employees resign/retire from the company there can be strain on the cash flows.

D. Market Risk:

Market risk is a collective term for risks that are related to the changes and fluctuations of the financial markets. One actuarial assumption that has a material effect is the discount rate. The discount rate reflects the time value of money. An increase in discount rate leads to decrease in Defined Benefit Obligation of the plan benefits & vice versa. This assumption depends on the yields on the corporate/government bonds and hence the valuation of liability is exposed to fluctuations in the yields as at the valuation date.

E. Legislative Risk:

Legislative risk is the risk of increase in the plan liabilities or reduction in the plan assets due to change in the legislation/ regulation. The government may amend the Payment of Gratuity Act thus requiring the companies to pay higher benefits to the employees. This will directly affect the present value of the Defined Benefit Obligation and the same will have to be recognized immediately in the year when any such amendment is effective.

33 For the year ending on 31^st March, 2024, the company has discontinued to make the provision of interest on loans from banks amounting to '' 146.61 lakhs.

34 The Company has long term investment in the shares of SAL Steel Limited amounting to '' 3,994.96 Lakhs. There is major movement in the prices of stock in share market such circumstances indicate that there is increase, other than temporary, in the value of a long-term investment. And as a re-sult, we have accounted for investment in shares of SAL Steel Ltd at market rate of shares @ '' 20.71 per share increase the value of investment to '' 6266.22 Lakhs and provided for '' 2139.17 Lakhs as notional gain in the value of investment in books of accounts.

b) Capital Commitments:

Estimated amount of contracts remaining to be executed on capital account [net of advances] and not provided for '' NIL (P.Y '' NIL)

Note:

(a) It is not practicable for the company to estimate the timings of cash outflows, if any, in respect of the above, pending resolution of the respective proceedings as it is determinable only on receipt of judgments/decisions pending with various forums/ authorities.

(b) The Company has reviewed all its pending litigations and proceedings and has adequately provided for where provisions are required and disclosed as contingent liabilities where applicable, in its financial statements. The Company does not expect the outcome of these proceedings to have a materially adverse effect on its financial results.

37 Certain Balance of Debtors, Creditors, are non- moving / sticky since last 3 years. However, in view of the management, the same is recoverable / payable. Hence no provision for the same is made in the books of accounts.

38 In the opinion of the Board of Directors, the current assets, loans and advances are approximately of the value stated, if realized in the ordinary course of business and the provisions for depreciation and all known and ascertained liabilities are adequate and not in excess of the amounts reasonably necessary.

42 The Company has not evaluated the provisioning requirement of a loss allowance on its financial assets so as to give impact of impairment if any as per the expected credit loss method as per the requirement of lnd AS 109 ''Financial Instruments'' and hence, the effect of the same if any on the Financial Results is not identifiable.

43 As stated by the Management, the Company has not recognized any Impairment of entire Capital Work in Progress (CWIP) of '' 900.50 lakhs for the year ended on 31/03/2024. The management has assessed the carrying amount of CWIP based on expected future economic benefits. The management believes that the carrying value of CWIP is recoverable and does not warrant any impairment as of the year ended on 31/03/2024.

44 During the Year under review, the company has written back creditors amounting to '' 1675.65 lakhs, in case of one of the creditors, the legal suit is decided in favour of the company and in view of the management the same is not payable, and also in case of other creditors management is of the view that the said creditors are not payable accordingly they have been written back and credited to statement of Profit and loss account as Other Income.

45 The Company has entered into a Settlement Agreement dated 13.12.2023 with Giant Stride Capital MU Limited (formerly known as AMIF Limited), who had initiated legal proceedings against the Company claiming to be the alleged Bondholder of Foreign Currency Convertible Bonds. While the matter was sub judice, without admitting any liability as due and payable under the said Bonds, in order to buy peace mind and to put an end to the litigation, the Company has entered into a Settlement Agreement dated 13.12.2023 with the said claimant and agreed to pay an amount of '' 1560 lakhs as the settlement amount. The said amount is shown as "Exceptional Item" in the profit and loss account.

46 As Stated, by the Management, the company does not currently have insurance coverage for its Property, Plant & Equipment. The Company may face the financial losses without any claim or compensation from an insurance provider.

47 As stated & Confirmed by the Management, the company does not have details w.r.t MSME Vendors as prescribed under MSME Act, 2006 which states as specified Companies (Furnishing of information about payment to micro and small enterprise suppliers) Order 2019 and hence the company has not provided the same.

48 The balance confirmations from the suppliers and customers have been called for, but the same are awaited till the date of audit. Thus, the balances of receivables, advance from customers and trade payables have been taken as per the books of accounts submitted by the management of the company and are subject to confirmation from the respective parties.

49 During the year under review, the company has sold its Captive Power Plant for a consideration of '' 852.33 lakhs. The Profit on sale the said Captive Power Plant of '' 609.21 lakhs has been shown as income in the Statement of Profit and loss and has been reflected as an "Exceptional Item" in the Statement of Profit and loss for the year ended on 31^st March, 2024.

50 The financial statements were authorized for issue by the directors on 30^th May, 2024.

51 CORPORATE SOCIAL RESPONSIBILITY CONTRIBUTION-

As per Section 135 of the Companies Act, 2013, a company, meeting the applicability threshold, needs to spend at least 2% of its average net profit for the immediately preceding three financial years on corporate social responsibility (CSR) activities. The areas for CSR activities are Promoting education, including special education and employment enhancing vocation skill and other activities as mentioned in Schedule VII of the Companies Act, 2013. A CSR committee has been formed by the company as per the Act. The funds were primarily utilized throughout the year on these activities which are specified in Schedule VII of the Companies Act, 2013:

52 UNDISCLOSED TRANSACTIONS

As stated, & confirmed by the Board of Directors, The Company does not have any such transaction which is not recorded in the books of accounts that has 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

53 BENAMI TRANSACTIONS

As stated, & confirmed by the Board of Directors, The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.

54 LOAN OR INVESTMENT TO ULTIMATE BENEFICIARIES

As stated, & Confirmed by the Board of Directors, 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 enties identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or

ii. provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries

55 LOAN OR INVESTMENT FROM ULTIMATE BENEFICIARIES

As stated, & Confirmed by the Board of Directors, 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 Company shall:

(a) 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

(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries

56 WILLFUL DEFAULTER

As stated, & Confirmed by the Board of Directors, the company has not been declared willful defaulter by the bank during the year under review.

57 TRANSACTIONS WITH STRUCK OFF COMPANIES

As stated, & Confirmed by the Board of Directors, the company has not under taken any transactions nor has outstanding balance with the company Struck Off either under section 248 of the Act or under Section 560 of Companies act 1956.

58 SATISFACTION OF CHARGE

As informed by the Management there are no charges which are yet to be registered or yet to be satisfied with Registrar of Companies beyond statutory period. However, while caring out search on MCA portal, following charges are yet to be satisfied beyond the statutory period, details of which are as under:

59 CRYPTO CURRENCY

As stated, & Confirmed by the Board of Directors. The Company has not traded or invested in Crypto Currency or Virtual Currency.

60 COMPLIANCE WITH NUMBER OF LAYERS OF COMPANIES:

As informed and confirmed by the Board of Directors, the Company has complied with the number of layers prescribed under clause (87) of section 2 of the Act read with Companies (Restriction on number of Layers) Rules, 2017.

61 COMPLIANCE WITH SCHEME OF ARRANGEMENT

The Company has not applied for any scheme of Arrangements under sections 230 to 237 of the Companies Act 2013.

62 As stated & Confirmed by the Board of Directors, The company has not been sanctioned any term loan during the year not there is outstanding term loans as at 31^st March 2024.

63 As stated & Confirmed by the Board of Directors, the Property, plant and equipment is in the name of the company.

64 As stated & confirmed by the board of Directors, the company has not revalued its Property, Plant and Equipment during the year under review.

65 As stated & Confirmed by the board of Directors, the Company has not been sanctioned working capital limits from a bank on the basis of security of the current assets.

66 As stated and Confirmed by, the management, the Company Secretary (CS) has resigned w.e.f 11-05-2024 and the company is in process of appointing new CS

Signatures to Notes - 1 to 66

Notes referred to herein above form an integral part of the Financial Statements.

As per our report of even date attached.

For Parikh & Majmudar For and on behalf of the Board of Directors,

Chartered Accountants Shah Alloys Limited

(Firm Regn.No.107525W)

UDIN: 24107628BJZWRZ6265

CA Satwik Durkal [Rajendra V Shah] [Ashok Sharma] [Mrinal Sinha]

Partner Chairman Whole Time Director & CFO Whole Time Director

Membership No. : 107628 DIN- 0020904 DIN-0038360 DIN- 09482143

Place : Ahmedabad Date : 30^th May, 2024

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Mar 31, 2023

1.16 PROVISIONS,CONTINGENTLIABILITIESANDCONTINGENTASSETS

i) Provisions are made when (a) the Company has a present legal or constructive obligation as a result of past events; (b) it

is probable that an outflow of resources embodying economic benefits will be required to settle the obligation; and (c) a

reliable estimate is made of the amount of the obligation.

ii) Contingent liabilities are not provided for but are disclosed by way of Notes on Accounts. Contingent liabilities is disclosed in case of a present obligation from past events (a) when it is not probable that an outflow of resources will be required to settle the obligation;(b)when no reliable estimate is possible;(c)unless the probability of outflow of resources is remote.

iii) Contingent assets are not accounted but disclosed by way of Notes on Accounts where the inflow of economic benefits is probable.

1.17 CURRENT AND NON-CURRENT CLASSIFICATION

i) The Normal Operating Cycle for the Company has been assumed to be of twelve months for classification of its various assets and liabilities into "Current" and "Non-Current".

ii) The Company presents assets and liabilities in the balance sheet based on current and non-current classification.

iii) An asset is current when it is (a) expected to be realized or intended to be sold or consumed in normal operating cycle; (b) held primarily for the purpose of trading; (c) expected to be realized within twelve months after the reporting period; (d) Cash and cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period. All other assets are classified as non-current.

iv) An liability is current when (a) it is expected to be settled in normal operating cycle; (b) it is held primarily for the purpose of trading; (c) it is due to be discharged within twelve months after the reporting period; (d) there is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period. All other liabilities are classified as non-current.

1.18 RELATED PARTY TRANSACTIONS

i) A related party is a person or entity that is related to the reporting entity preparing its financial statements (a) A person or a close member of that person''s family is related to reporting entity if that person;

(i) Has control or joint control of the reporting entity;

(ii) Has significant influence over the reporting entity; or

(iii) Is a member of the key management personnel of the reporting entity or of a parent of the reporting entity.

(b) An entity is related to a reporting entity if any of the following conditions applies;

(i) the entity and the reporting entity are members of the same group (which means that each parent, subsidiary and fellow subsidiary is related to the others);

(ii) One entity is an associate or joint venture of the other entity (or an associate or joint venture of a member of a group of which the other entity is a member);

(iii) Both entities are joint ventures of the same third party;

(iv) One entity is a joint venture of a third entity and the other entity is an associate of the third entity;

(v) The entity is a post-employment benefit plan for the benefit of employees of either the reporting entity or an entity related to the reporting entity;

(vi) The entity is controlled or jointly controlled by a person identified in (a);

(vii) A person identified in (a)

(i) Has significant influence over the entity or is a member of the key management personnel of the entity(or of a parent of the entity);

(viii) The entity, or any member of a group of which it is a part, provides key management personnel services to the reporting entity or to the parent of the reporting entity.

ii) A related party transaction is a transfer of resources, services or obligations between a reporting entity and a related party, regardless of whether a price is charged.

Close members of the family of a person are those family members who may be expected to influence, or be influenced by, that person in their dealings with the entity.

Compensation includes all employee benefits i.e. all forms of consideration paid, payable or provided by the entity, or on behalf of the entity, in exchange for services rendered to the entity. It also includes such consideration paid on behalf of a parent of the entity in respect of the entity.

Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the entity, directly or indirectly, including any director (whether executive or otherwise) of that entity.

iii) Disclosure of related party transactions as required by the accounting standard is furnished in the Notes on Financial Statements.

1.19 EARNINGS PER SHARE

i) Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period.

ii) For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

1.20LEASE

The Company evaluates if an arrangement qualifies to be a lease as per the requirements of Ind AS 116. Identification of a lease requires significant judgment. The Company uses significant judgement in assessing the lease term (including anticipated renewals) and the applicable discount rate. The Company determines the lease term as the non-cancellable period of a lease, together with both periods covered by an option to extend the lease if the Company is reasonably certain to exercise that option; and periods covered by an option to terminate the lease if the Company is reasonably certain not to exercise that option. In assessing whether the Company is reasonably certain to exercise an option to extend a lease, or not to exercise an option to terminate a lease, it considers all relevant facts and circumstances that create an economic incentive for the Company to exercise the option to extend the lease, or not to exercise the option to terminate the lease. The Company revises the lease term if there is a change in the non-cancellable period of a lease.

1.21 CRITICAL ACCOUNTING JUDGMENTS, ASSUMPTIONS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

The preparation of the Standalone Financial Statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities at the date of the financial statements. Estimates and assumptions are continuously evaluated and are based on management''s experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

a) Judgments

In the process of applying the Company''s accounting policies, management has made the following judgements, which have the most significant effect on the amounts recognized in the standalone financial statements:

(i) Determination of Functional Currency

Currency of the primary economic environment in which the Company operates ("the functional currency") is Indian Rupee (?) in which the company primarily generates and expends cash. Accordingly, the Management has assessed its functional currency to be Indian Rupee (?).

(ii) Evaluation of Indicators for Impairment of Property, Plant and Equipment

The evaluation of applicability of indicators of impairment of assets requires assessment of external factors (significant decline asset''s value, significant changes in the technological, market, economic or legal environment, market interest rates etc.) and internal factors (obsolescence or physical damage of an asset, poor economic performance of the asset etc.) which could result in significant change in recoverable amount of the Property, Plant and Equipment.

b) Assumptions and Estimation Uncertainties

Information about estimates and assumptions that have the significant effect on recognition and measurement of assets, liabilities, income and expenses is provided below. Actual results may differ from these estimates.

(i) Taxes

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

The Company has carried forward loss on which deferred tax asset is created, based on probability that future profits will be available against which the deductible temporary difference can be realized.

(ii) Useful lives of Property, Plant and Equipment/Intangible Assets

Property, Plant and Equipment/ Intangible Assets are depreciated/amortised over their estimated useful lives, after taking into account estimated residual value. The useful lives and residual values are based on the Company''s historical experience with similar assets and taking into account anticipated technological changes or commercial obsolescence. Management reviews the estimated useful lives and residual values of the assets annually in order to determine the amount of depreciation/amortisation to be recorded during any reporting period. The depreciation/amortisation for future periods is revised, if there are significant changes from previous estimates and accordingly, the unamortised/ depreciable amount is charged over the remaining useful life of the assets.

(iii) Contingent Liabilities

In the normal course of business, Contingent Liabilities may arise from litigation and other claims against the company. Potential liabilities that are possible but not probable of crystallising or are very difficult to quantify reliably are treated as contingent liabilities. Such liabilities are disclosed in the Notes but are not recognised. Potential liabilities that are remote are neither recognised nor disclosed as contingent liability. The management decides whether the matters need to be classified as ''remote'', ''possible'' or ''probable'' based on expert advice, past judgements, experiences etc.

(iv) Evaluation of Indicators for Impairment of Property, Plant and Equipment

The evaluation of applicability of indicators of impairment of assets requires assessment of external factors (significant decline in asset''s value, economic or legal environment, market interest rates etc.) and internal factors (obsolescence or physical damage of an asset, poor economic performance of the idle assets etc.) which could result in significant change in recoverable amount of the Property, Plant and Equipment and such assessment is based on estimates, future plans as envisaged by the Group.

(v) Provisions

Provisions and liabilities are recognised in the period when it becomes probable that there will be a future outflow of funds resulting from past operations or events and the amount of cash outflow can be reliably estimated. The timing of recognition and quantification of the liability requires the application of judgement to existing facts and circumstances, which can be subject to change. The carrying amounts of provisions and liabilities are reviewed regularly and revised to take account of changing facts and circumstances.

31. FINANCIAL AND DERIVATIVE INSTRUMENTS Capital Management

The company''s objective when managing capital is to:

- Safeguard its ability to continue as a going concern so that the Company is able to provide maximum return to stakeholders and benefits for other stakeholders.

- Maintain an optimal capital structure to reduce the cost of capital.

The company''s Board of director''s reviews the capital structure on regular basis. As part of this review the board considers the cost of capital risk associated with each class of capital requirements and maintenance of adequate liquidity.

Disclosures

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, the 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 Accounting policies as stated above

(ii) Fair Value Measurement

This note provides information about how the Company determines fair values of various financial assets.

Fair Value of financial assets and liabilities that are not measured at fair value (but fair value disclosures are required).

Management considers that the carrying amounts of financial assets and financial liabilities recognized in the financial statements approximate their fair values.

(iii) Financial Risk Management Objectives

While ensuring liquidity is sufficient to meet Company''s operational requirements, the Company''s financial management committee also monitors and manages key financial risks relating to the operations of the Company by analyzing exposures by degree and magnitude of risks. These risks include market risk (including currency risk and price risk), credit risk and liquidity risk.

Market Risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises two types of risk: interest rate, currency risk and other price risk, such as commodity price risk and equity price risk. Financial instruments affected by market risk include FVTPL investments, trade payables, trade receivables, etc.

Foreign Currency Risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company''s exposure to the risk of changes in foreign exchange rates relates primarily to the Company''s operating activities. The Company has a treasury department which monitors the foreign exchange fluctuations on the continuous basis and advises the management of any material adverse effect on the Company.

Interest Rate Risk

The Company''s interest rate risk arises from the Long Term Borrowings with fixed rates. The Company''s fixed rates borrowings are carried at amortized cost.

Liquidity Risk

The Company manages liquidity risk by maintaining sufficient cash and cash equivalents including bank deposits and availability of funding through an adequate amount of committed credit facilities to meet the obligations when due.

Management monitors rolling forecasts of liquidity position and cash and cash equivalents on the basis of expected cash flows. In addition, liquidity management also involves projecting cash flows considering level of liquid assets necessary to meet obligations by matching the maturity profiles of financial assets & liabilities and monitoring balance sheet liquidity ratios.

The following tables detail the Company''s remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods. The information included in the tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company can be required to pay. The contractual maturity is based on the earliest date on which the Company may be required to pay.

The following are the contractual maturities of non-derivative financial liabilities, based on contractual cash flows:

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).

Trade Receivables

An impairment analysis is performed at each reporting date on an individual basis for all the customers. In addition, a large number of minor receivables are grouped into homogenous groups and assessed for impairment collectively. The maximum exposure to credit risk at the reporting date is the carrying value of trade receivables disclosed in Note 8 as the Company does not hold collateral as security. The Company has evaluated the concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions and industries.

The Company has made assessment of Allowance for Credit Loss in respect of Trade Receivables The Company has analysed its trade receivables for gaining analysis and grouped them accordingly and then applied ear wise percentage to calculate the amount of Allowance for Credit Loss in respect of the same.

Movement in the expected Allowance for Credit Loss in respect of Trade Receivables

(i) Defined Contribution Plan: Employee benefits in the form of Provident Fund are considered as defined contribution plan and the contributions to Employees Provident Fund Organization established under The Employees Provident Fund and Miscellaneous Provisions Act 1952 and Employees State Insurance Act, 1948, respectively, are charged to the profit and loss account of the year when the contributions to the respective funds are due.

(ii) Defined Benefit Plan: Retirement benefits in the form of Gratuity are considered as defined benefit obligation and are provided for on the basis of third party actuarial valuation, using the projected unit credit method, as at the date of the Balance Sheet.

Every Employee who has completed five years or more of service is entitled to Gratuity on terms not less favorable than the provisions of The Payment of Gratuity Act, 1972.

As the Company has not funded its liability, it has nothing to disclose regarding plan assets and its reconciliation.

(iii) Major risk to the plan

I have outlined the following risks associated with the plan:

A. Actuarial Risk:

It is the risk that benefits will cost more than expected. This can arise due to one of the following reasons:

Adverse Salary Growth Experience: Salary hikes that are higher than the assumed salary escalation will result into an increase in Obligation at a rate that is higher than expected.

Variability in mortality rates: If actual mortality rates are higher than assumed mortality rate assumption than the Gratuity Benefits will be paid earlier than expected. Since there is no condition of vesting on the death benefit, the acceleration of cash flow will lead to an actuarial loss or gain depending on the relative values of the assumed salary growth and discount rate.

Variability in withdrawal rates: If actual withdrawal rates are higher than assumed withdrawal rate assumption than the Gratuity Benefits will be paid earlier than expected. The impact of this will depend on whether the benefits are vested as at the resignation date.

B. Investment Risk:

For funded plans that rely on insurers for managing the assets, the value of assets certified by the insurer may not be the fair value of instruments backing the liability. In such cases, the present value of the assets is independent of the future discount rate. This can result in wide fluctuations in the net liability or the funded status if there are significant changes in the discount rate during the inter-valuation period.

C. Liquidity Risk:

Employees with high salaries and long durations or those higher in hierarchy, accumulate significant level of benefits. If some of such employees resign/retire from the company there can be strain on the cash flows.

D. Market Risk:

Market risk is a collective term for risks that are related to the changes and fluctuations of the financial markets. One actuarial assumption that has a material effect is the discount rate. The discount rate reflects the time value of money. An increase in discount rate leads to decrease in Defined Benefit Obligation of the plan benefits & vice versa. This assumption depends on the yields on the corporate/government bonds and hence the valuation of liability is exposed to fluctuations in the yields as at the valuation date.

E. Legislative Risk:

Legislative risk is the risk of increase in the plan liabilities or reduction in the plan assets due to change in the legislation/ regulation. The government may amend the Payment of Gratuity Act thus requiring the companies to pay higher benefits to the employees. This will directly affect the present value of the Defined Benefit Obligation and the same will have to be recognized immediately in the year when any such amendment is effective.

33. For the year ending on 31^st March, 2023, the company has discontinued to make the provision of interest on loans from banks (excluding on the settlement entered with ARCs for specific loans which are assigned to them) amounting to '' 146.61 lakhs.

34. The Company has long term investment in the shares of SAL Steel Limited amounting to '' 3,994.96 Lakhs. There is major movement in the prices of stock in share market such circumstances indicate that there is increase, other than temporary, in the value of a long term investment. And as a result, we have accounted for investment in shares of SAL Steel Ltd at market rate of shares @ '' 13.64 per share increase the value of investment to '' 4127.05 Lakhs and provided for '' 1116.48 Lakhs as notional gain in the value of investment in books of accounts.

Note:

(a) It is not practicable for the company to estimate the timings of cash outflows, if any, in respect of the above, pending resolution of the respective proceedings as it is determinable only on receipt of judgments/decisions pending with various forums/ authorities.

(b) The Company has reviewed all its pending litigations and proceedings and has adequately provided for where provisions are required and disclosed as contingent liabilities where applicable, in its financial statements. The Company does not expect the outcome of these proceedings to have a materially adverse effect on its financial results.

(2) Corporate Guarantee given to consortium Bank for SAL Steel Ltd. '' NIL (P.Y. '' 20750.00 Lakhs)

37. Certain Balance of Debtors, Creditors, are non- moving / sticky since last 3 years. However in view of the management, the same is recoverable / payable. Hence no provision for the same is made in the books of accounts.

38. In the opinion of the Board of Directors, the current assets, loans and advances are approximately of the value stated, if realized in the ordinary course of business and the provisions for depreciation and all known and ascertained liabilities are adequate and not in excess of the amounts reasonably necessary.

39. The company has sought balance confirmations from trade receivables and trade payables, wherever such balance confirmations are received by the Company, the same are reconciled and appropriate adjustments if required, are made in the books of account

41. Previous year figures have been re-grouped / rearranged, wherever necessary to make them comparable with those of current year

42. The Company has not assessed the impact of Effective Interest Method to the finance cost as per the requirement of Ind AS 109 ''Financial Instruments and hence, the effect of the same, if any, on the financial results is not identifiable.

43. The Company has not evaluated the provisioning requirement of a loss allowance on its financial assets so as to give impact of impairment if any as per the expected credit loss method as per the requirement of lnd AS 109 ''Financial Instruments'' and hence, the effect of the same if any on the Financial Results is not identifiable.

43A The capital work in progress of '' 900.50 lakhs comprises of the capital expenditure incurred by the Company in relation to a Cold Rolling Mill (CRM3), whose implementation has not been completed by the Company. However, the Company intends to implement the said project and to commence the operation within next 12 months. The Company has also prepared operating cash flows and based on the assumptions relating to commencement of the commercial production of the said CRM3. In view of the management, no provision for impairment is required to be made in connection with the said capital work in progress asset.

44. In accordance with the Indian Accounting Standard (Ind AS-36) on "Impairment of Assets" the Company during the year carried out an exercise of identifying the assets that may have been impaired in respect of cash generating unit in accordance with the said Indian Accounting Standard. Based on the exercise, no impairment loss is required as at 31^st March, 2023.

45. The financial statements were authorized for issue by the directors on 29^th May, 2023.

46. Corporate Social Responsibility contribution-

As per Section 135 of the Companies Act, 2013, a company, meeting the applicability threshold, needs to spend at least 2% of its average net profit for the immediately preceding three financial years on corporate social responsibility (CSR) activities. The areas for CSR activities are Promoting education, including special education and employment enhancing vocation skill and other activities as mentioned in Schedule VII of the Companies Act, 2013. A CSR committee has been formed by the company as per the Act. The funds were primarily utilized throughout the year on these activities which are specified in Schedule VII of the Companies Act, 2013:

48. UNDISCLOSED TRANSACTIONS

As stated & confirmed by the Board of Directors, The Company does not have any such transaction which is not recorded in the books of accounts that has 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

49. BENAMI TRANSACTIONS

As stated & confirmed by the Board of Directors, The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.

50. LOAN OR INVESTMENT TO ULTIMATE BENEFICIARIES

As stated & Confirmed by the Board of Directors ,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 enties identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or

ii. provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries

51. LOAN OR INVESTMENT FROM ULTIMATE BENEFICIARIES

As stated & Confirmed by the Board of Directors ,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 Company shall:

(a) 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

(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries

52. WILLFUL DEFAULTER

As stated & Confirmed by the Board of Directors ,The company has not been declared willful defaulter by the bank during the year under review.

55. CRYPTO CURRENCY

As stated & Confirmed by the Board of Directors. The Company has not traded or invested in Crypto Currency or Virtual Currency.

56. COMPLIANCE WITH NUMBER OF LAYERS OF COMPANIES:

As informed and confirmed by the Board of Directors, the Company has complied with the number of layers prescribed under clause (87) of section 2 of the Act read with Companies (Restriction on number of Layers) Rules, 2017.

57. COMPLIANCE WITH SCHEME OF ARRANGEMENT

The Company has not applied for any scheme of Arrangements under sections 230 to 237 of the Companies Act 2013.

58. As stated & Confirmed by the Board of Directors, The company has not been sanctioned any term loan during the year not there is outstanding term loans as at 31^st March 2023.

59. As stated & Confirmed by the Board of Directors, the Property, plant and equipment is in the name of the company.

60. As stated & confirmed by the board of Directors, the company has not revalued its Property, Plant and Equipment during the year under review.

61. As stated & Confirmed by the board of Directors, the Company has not been sanctioned working capital limits from a bank on the basis of security of the current assets.

Signatures to Notes - 1 to 61

As per our report of even date attached.

Notes referred to herein above form an integral part of the Financial Statements.

For Parikh & Majmudar For and on behalf of the Board of Directors,

Chartered Accountants Shah Alloys Limited

(Firm Regn.No.107525W)

UDIN: 23107628BHAMTN4326

CA Satwik Durkal [Ashok Sharma] [Rajendra V Shah]

Partner Whole Time Director & CFO Chairman

Membership No. : 107628 DIN-0038360 DIN- 0020904

[Mayank Chadha] [Mrinal Sinha]

Place : Ahmedabad Company Secretary Whole Time Director

Date : 29^th May,2023 (M. No. : A54288) DIN- 09482143

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Mar 31, 2018

NOTES TO FINANCIAL ACCOUNT

44. Foreign currency exposure at the year end not hedged by derivative instruments :

(Amount Rs. in Lakhs)

Particulars	As At March 31, 2018	As At March 31, 2017
Advance Payment to Suppliers
Rupees in Lakhs	288.55	117.52
US Dollar in Lakhs	4.44	1.81
FCCB Payable (Including Interest)
Rupees in Lakhs	7237.88	7237.88
US Dollar in Lakhs	148.25	148.25

45. Contingent liabilities :

(1) Claims against the Company not acknowledged as debts

Particulars
1.	Disputed Income Tax Liability matter under Appeal	Rs. Nil
		(P.Y 1.30 Lakhs)
2.	Disputed Excise, Service Tax Demand Matter Under Appeal	Rs. 2122.84 Lakhs
		(P.Y.Rs. 2278.11 Lakhs)
3.	Disputed VAT Liability matter under Appeal	381.28 Lakhs
		(P.Y 388.27 Lakhs)
4.	Claim against the company not acknowledged as debt - Claim by parties	Rs. 26505.88 Lakhs
		(P.Y 27890.97 Lakhs)
	Bank / Financial Institutions	Rs. 82486.23 Lakhs
		(P Y Rs. 72938.37 Lakhs)

Note:

(a) It is not practicable for the company to estimate the timings of cash outflows, if any, in respect of the above, pending resolution of the respective proceedings as it is determinable only on receipt of judgments/decisions pending with various forums/ authorities.

(b) The Company has reviewed all its pending litigations and proceedings and has adequately provided for where provisions are required and disclosed as contingent liabilities where applicable, in its financial statements. The Company does not expect the outcome of these proceedings to have a materially adverse effect on its financial results.

(2) Corporate Guarantee given to consortium Bank for SAL Steel Ltd. Rs. 20750.00 Lakhs (P.Y. Rs 20750.00 Lakhs)

46. Certain Balance of Debtors, Creditors, Loans & Advances for Capital expenditures are non- moving / sticky. However in view of the management, the same is recoverable / payable. Hence no provision for the same is made in the books of accounts.

47. In the opinion of the Board of Directors, the current assets, loans and advances are approximately of the value stated, if realized in the ordinary course of business and the provisions for depreciation and all known and ascertained liabilities are adequate and not in excess of the amounts reasonably necessary.

48. Inventories are as taken, valued and certified by the management.

49. The Company has long term investment in the shares of SAL Steel Limited amounting to Rs. 3,994.96 Lakhs. Based on the audited financial statement of SAL Steel Limited as at 31st March, 2018, the Company has accumulated losses and its net worth has been fully eroded. The Financial results of SAL Steel Limited also indicates that the Company has and the Company''s current liabilities exceeded its current assets as at the current and previous year balance sheet date. Also there is nomajor movement in the prices of stock in share market. All such circumstances indicate that there is decline, other than temporary, in the value of a long term investment. And as a result, we have accounted for investment in shares of SAL Steel Ltd at market rate of shares @ Rs. 7.21 per share reducing the value of investment to Rs, 2181.53 Lakhs and provided for Rs. 1813.43 Lakhs as diminution other than temporary in the value of investment in books of accounts.

50. The Company has not received information from the Suppliers regarding their status under The Micro, Small & Medium Enterprises Development Act, 2006. Hence, disclosures, if any relating to amounts unpaid as at the balance sheet date together with interest paid or payable as per the requirement under the said Act, have not been made. However, on prima facie scrutiny, no interest has been paid to suppliers.

A) EQUITY SHARE CAPITAL
Particulars	(Amount Rs In Lakhs)
For the year ended 31st March, 2018
Balance as at 1st April 2017	1,979.75
Changes in equity share capital during the year	0
Issued during the year	0
Balance as at 31st March 2018	1,979.75
For the year ended 31st March, 2017
Balance as at 1st April 2016	1,979.75
Changes in equity share capital during the year -	0
Balance as at 31st March 2017	1,979.75

B) OTHER EQUITY

Reconciliation of Other Equity as at 1st April 2016

(Amount Rs In Lakhs)

Particulars	Capital Reserve	Securities Premium Reserve	Debenture Redemption Reserve	Retained Earnings	Other Comprehensive Income	Total
Balance at the beginning of the reporting period	_	502.61	6,000.00	(79,428.59)	_	(72,925.98)
Adjustments as per Ind AS	-	-	-	(81.27)		(81.27)
Profit for the year	21,394.43	-	-	12,438.88	-	33,833.30
Balance at the end of the reporting period	21,394.43	502.61	6,000.00	(67,070.98)	_	(39,173.94)

Reconciliation of Other Equity as at 31st March 2017

(Amount Rs In Lakhs)

Particulars	Capital Reserve	Securities Premium Reserve	Debenture Redemption Reserve	Retained Earnings	Other Comprehensive Income	Total
Balance at the beginning of the reporting period	21,394.43	502.61	6,000.00	(62,944.57)	_	(35,047.53)
Dividend on Equity Shares	-	-	-	-	-	-
Tax on Dividend	-	-	-	-	-	-
Adjustments as per Ind AS	-	-	-	(4,126.41)	9.62	(4,116.79)
Profit for the year	6,888.30	-	-	4,307.22	-	11,195.52
Balance at the end of the reporting period	28,282.73	502.61	6,000.00	(62,763.76)	9.62	(27,968.81)

Notes to first time adoption

a Property Plant and Equipment

On transition to Ind AS, the Company has elected to continue with the carrying value of all of its property, plant and equipment as at 1st April 2016 measured as per the previous GAAP and use that carrying value as the deemed cost of the property, plant and equipment.

b Re-Classification

Assets / liabilities which do not meet the definition of financial asset / financial liability have been reclassified to other asset / liability.

c Prior Period Items

This company has recorded a prior period error in the FY 2016-17 pertaining to the year FY 2015-16. Hence the same is adjusted in the opening reserves of the Balance Sheet as at 1-4-2016. Moreover, the prior period error with respect to the FY 2016-17, which was to be recorded in FY 2017-18, has been adjusted under the head Other Admin Expenses in the Statement of Profit or Loss.

d Excise Duty

Under the previous GAAP, revenue from sale of products was presented exclusive of excise duty. Under Ind AS, revenue from sale

of goods is presented inclusive of excise duty. The excise duty paid is presented on the face of statement of profit and Loss as part of expenses

e Deferred Tax

Indian GAAP requires deferred tax accounting using the income statement approach, which focuses on differences between taxable profits and accounting profits for the period. Ind AS 12 requires entities to account for deferred taxes using the balance sheet approach, which focuses on temporary differences between the carrying amount of an asset or liability in the balance sheet and its tax base. The application of Ind AS 12 approach has resulted in recognition of deferred tax on new temporary differences which was not required under Indian GAAP. In addition, the various transitional adjustments lead to temporary differences. Deferred tax adjustments are recognised in correlation to the underlying transaction in retained earnings.

f Actuarial gain/(loss) on Defined Benefit plans for Employee Benefits:

Under Ind AS, the change in defined benefit liability is split into changes arising out of service and interest cost and changes arising out of remeasurements. Changes due to service and interest cost are to be recognised in Profit and Loss account and the changes arising out of re-measurements are to be recognised directly in Other Comprehensive Income (OCI).

53-A TAX RECONCILIATION

Income taxes recognised In Statement of Profit and Loss

	(Amount Rs In Lakhs)
Particulars	For the Year ended on 31st March, 2018	For the Year ended on 31st March, 2017
Current tax
In respect of the current year	-	-
(Excess)/Short provision for tax of earlier years	-	-
Deferred tax(credit) /Charged	8,504.20	1,013.75
Total income tax expense recognised in respect of continuing operations	8,504.20	1,013.75

Tax reconciliation

The income tax expense for the year can be reconciled to the accounting profit as follows:

		Amount Rs In Lakhs)
Particulars	For the Year ended on 31st March, 2018	For the Year ended on 31st March, 2017
Profit before taxes	-	-
Enacted tax rate in India	34.940%	34.610%
Expected income tax benefit/(expense) at statutory tax rate Effect of:-	-	-
Deferred tax(credit) /Charged Income taxes recognised in the Statement of Profit and Loss	8,504.20	1,013.75
	8,504.20	1,013.75

The tax rate used for the 2017-18 and 2016-17 reconciliations above is the corporate tax rate of 30% plus surcharge @ 12% and (Cess @ 3% for 2016-17 and Cess 4 % for 2017-18) payable by corporate entities in India on taxable profits under the Indian tax laws.

Income tax recognised in other comprehensive income (Amount Rs in Lakhs)

Particulars	For the Year ended on 31st March, 2018	For the Year ended on 31st March, 2017
Deferred tax
Arising on income and expenses recognised in other comprehensive income: Remeasurement of defined benefit obligation	7.15	2.48
Total income tax recognised in other comprehensive income	7.15	2.48
Bifurcation of the income tax recognised in other comprehensive income into:-Items that will not be reclassified to Statement of Profit and Loss	7.15	2.48
Income tax recognised in other comprehensive income	7.15	2.48

Note: Deferred tax liability has been calculated using effective tax rate of 34.94%

Components of deferred tax assets and liabilities

(Amount Rs in Lakhs)

Particulars	As at 31st March, 2018	As at 31st March, 2017
(a) Deferred tax assets
Unabsorbed Loss	19,204.10	28,101.12
Disallowances of employee benefits u/s. 43 B of the Income Tax	4,474.10	8,341.26
	23,678.20	36,442.38
(b) Deferred tax liabilities
Diff. between book and tax depreciation	2,497.26	2,637.95
	2,497.26	2,637.95
Deferred Tax Assets (Net)	21,180.94	33,804.43

54.	RECONCILAITON OF PROFIT AND LOSS	(Amount Rs. in Lakhs)
	RECONCILIATION OF PROFIT AND LOSS ACCOUNT
	NET PROFIT FOR THE YEAR ENDED 31.3.2017 AS PER GAAP ADJUSTMENTS AS PER IND AS	4235.56
	Positive Adiustments
	Prior period expenditure	81.28
	Excise Duty	3759.10
	Reclassification of Acturial Loss on Defined benefit plans to Other Comprehensive income	7.14
	Deffered Tax impact of INDAS Negative adiustments	2.48
	Excise Duty	3759.10
	Reclassification of Acturial Loss on Defined benefit plans to Other Comprehensive income	7.14
	Deffered Tax impact of INDAS	2.48
	NET PROFIT FOR THE YEAR ENDED 31.3.2017 AS PER IND AS	4,316.84

Signatures to Notes - 1 to 54.
Notes referred to herein above form an integral	For and on behalf of the Board of Directors,
part of the Financial Statements. As per our report of even date attached.	Shah Alloys Limited
For Parikh & Majmudar	Rajendra V. Shah	Chairman
Chartered Accountants	Ashok Sharma	Whole Time Director & CFO
(Firm Regn. No. 107525W)	K. S. Kamath	Jt. Managing Director
CA Dr. Hiten Parikh
Partner	Place : Santej
M.No.040230	Date : 30th May 2018
Place : Ahmedabad
Date : 30th May 2018

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Mar 31, 2016

b) Rights, Preferences and restrictions attached to shares Equity Shares

The company has one class of equity share having a par value of '' 10 each. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of directors is subject to the approval of shareholders in the ensuing Annual general meeting, except in case of interim dividend. In the case of liquidation, the equity shareholders are eligible to receive the remaining assets of the company after distribution of all preferential amounts, in proportion to their shareholding.

(A) SECURED :

a) Nature of security and terms of repayment for secured borrowings

I) Non Convertible Debentures

First Mortgage and charge on the company''s all immovable and movable properties (other than working capital assets), both present and future, ranking pari-passu with all term lenders.(except Punjab National Bank''s Corporate loan which has exclusive charge on 26,00,000 shares of SAL Steel Limited owned by Shah Alloys Limited. Thus First charge on fixed assets is not extended to Punjab National Bank over the Corporate loan) Second charges on WC assets of the company. Pledge of promoter''s entire shareholding ranking pari passu with all CDR lenders except for 26,00,000 shares on which Punjab National Bank has exclusive charge. Unconditional and irrevocable personal guarantee of the promoter-director Shri Rajendra Shah.

Non Convertible Debentures is repayable in equal monthly installment starting from June 2011 till May 2019.

II) Term Loan from Bank / Financial Institution:

First Mortgage and charge on the company''s all immovable and movable properties (other than working capital assets), both present and future, ranking pari-passu with all term lenders.(except Punjab National Bank''s Corporate loan which has exclusive charge on 26,00,000 shares of SAL Steel Limited owned by Shah Alloys Limited. Thus First charge on fixed assets is not extended to Punjab national bank over the Corporate loan) Second charges on WC assets of the company. Pledge of promoter''s entire shareholding ranking pari passu with all CDR lenders except for 26,00,000 shares on which Punjab national bank has exclusive charge. Unconditional and irrevocable personal guarantee of the promoter-director Shri Rajendra Shah.

As per the terms of CDR Company has provided interest onTerm Loan @10 % except LIC of India @8.75 %,on Working Capital Term Loan @10 % and on Funded Interest Term Loan @6 %

(B) UNSECURED :

Deposits:

The company has taken inter corporate deposit during the year from three related parties as mentioned herewith: SAL Care Pvt. Ltd. of Rs, 8,10,00,000/- SAL Corporation Pvt. Ltd. Rs, 26,00,000/- and SAL Hospital & Medical Institute Rs, 1,06,00,000/- .This party is covered under the register maintained under section 189 of the Companies Act , 2013.

a) Nature of security and terms of repayment for secured borrowings Cash Credit Facilities

Hypothecation first charges on company''s entire stocks of raw material, stock in progress, finished goods, book debts/receivables and all current assets stored in the company''s factory premises, at all plants and / or elsewhere including those in transit covered by documents of title thereto, local and export since bill ranking pari-passu in favor of all the working capital banks. Second charge on the entire movable and immovable assets both present and future on pari-passu basis. Pledge of promoter''s entire shareholding ranking pari-passu with all CDR lenders. Unconditional and irrevocable personal guarantee of the promoter-director Shri Rajendra Shah.

* The Company has not received information from the Suppliers regarding their status under The Micro, Small & Medium Enterprises Development Act, 2006. Hence, disclosures, if any relating to amounts unpaid as at the balance sheet date together with interest paid or payable as per the requirement under the said Act, have not been made.

# The Company, in September 2006, has raised US $ 10 million through Unsecured Zero Coupon Foreign Currency Convertible Bonds (FCCB), due in September, 2011. On full conversion of FCCB, the FCCB will be converted in to 26,41,143 Equity shares of Rs, 10 each at a premium of Rs, 165 per share , at the option of the Bondholders at any time before the maturity of the bonds. On Conversion, Capital will increase by Rs, 2,64,11,430 and Share Premium by Rs, 43,57,88,570/-. If Bonds are not converted, the company will have to repay the bonds at a premium & in US Dollars. The company has provided the premium till September, 2011 which has been adjusted against Security Premium in accordance with Section 52 of Companies Act, 2013.

Since Bond holders have yet not exercised the option no further interest has been accounted for. Accordingly Foreign Currency Convertible Bonds (FCCB) is due for repayment to Bond Holders. However, no payment has been made to Bond Holders.

* It includes amount in the nature of Statutory dues such as withholding taxes, service tax, VAT, Excise duty, etc.

VIII Expected Employer''s Contribution for the financial year

On the basis of previous year''s trend company is expecting to contribute the same amount as in 2015-16 to the defined contribution plan. However, for the defined benefit plan company is not liable to contribute any amount as the plans are unfounded.

The estimate of rate of escalation in salary considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment market. The above information is certified by the actuary.

1. In the opinion of the Board of Directors, the current assets, loans and advances are approximately of the value stated, if realized in the ordinary course of business and the provisions for depreciation and all known and ascertained liabilities are adequate and not in excess of the amounts reasonably necessary.

2. Corporate Debt Restructuring (CDR) Cell through their lead bank, Union Bank of India had sanctioned a comprehensive debt restructuring scheme vide their letter No. BY.CDR (ABP) No. 1084 dated 22.1.2008. As per scheme company was supposed to make monthly payment of interest & installment by 01st October 2009. Looking to prevailing condition and reciprocal obligation not fulfilled by the CDR lenders & consequential losses incurred by the company in the year 2008, company had again approached CDR Cell for extension of moratorium period and CDR Cell had approved the rework proposal of the company vide their letter dated BY.CDR (ABP) NO.380/2009-10 dated 03-07-2009. The principal terms of the 2nd CDR Scheme and its compliances are as under:

(a) Deferring repayment of Term loan Rs, 15,605.13 lacs Working capital term loan Rs, 17,782.65 lacs and Non Convertible Debentures Rs, 10,000.00 lacs for another 20 months, (from original due date for repayment of 01.10.2009) i.e. up to 31.05.2011. Repayment shall start from June 2011 and end on May 2019.

c) Rate of interest on Term Loan, Non Convertible Debenture and WCTL will be 10% p.a. for the term lenders who are presently charging more than 10% p.a. payable monthly. Existing rates will continue for those lenders who are charging less than 10% p.a. payable monthly and FITL will carry interest at the rate of 6 % per annum.

As per the terms of the CDR, the company has brought in Promoters'' contribution during the year 2009-10.

3. Secured Borrowings from the below mentioned banks have been transferred / assigned to financial institution together with all their rights, title and interest in the financial documents and any underline security interest/pledges and /or guarantees in respect of such loans.

Further the company has stopped making provision for interest on such borrowing from the date of transfer due to non execution of agreement with Asset Reconstruction Companies (ARC) and hence due to non availability of agreement with Asset Reconstruction Companies (ARC), the company has taken the CDR - 2 orders as base for classification of current / non-current liability and default of total borrowing.

4. The company had filed a reference with BIFR u/s 15(1) of the Sick Industrial Companies (Special Provision) Act, 1985. The Honorable BIFR vide its order number 13/2010 dated 31^st August, 2010 has declared that the company has become sick industrial company u/s 3(1)(o) of SICA. [Sick Industrial Companies (Special Provision) Act, 1985].

5. Balances of Secured Loan, Unsecured Loans, Bank balances, Sundry debtors, Creditors and Loans and advances are subject to confirmation from respective parties.

6. Certain balance of Debtors, Loans and Advances and Creditors are non-moving/ slow moving since long, however in view of the management the same is recoverable / payable and hence no provision for the same is made in the books of accounts.

7. The Company has long term investment in the shares of SAL Steel Limited amounting to Rs, 3,994.96 lacs. Based on the audited financial statement of SAL Steel Limited as at 31^st March, 2016, the Company has accumulated losses and its net worth has been fully eroded. The Financial results of SAL Steel Limited also indicates that the Company has a net loss during the current and previous year and the Company''s current liabilities exceeded its current assets as at the current and previous year balance sheet date. Also there is no major movement in the prices of stock in share market. As per AS 13, all such circumstances indicate that there is decline, other than temporary, in the value of a long term investment. And as a result, we have accounted for investment in shares of SAL Steel Ltd at market rate of shares @ Rs, 2.89 per share reducing the value of investment to Rs, 8,74.42 lacs and provided for Rs,. 3,120.54 lacs as diminution other than temporary in the value of investment in books of accounts.

8. As at the year end the Company has accumulated losses and its net worth has been fully eroded. The Financial results indicate that the Company has net loss during the previous years and the Company''s current liabilities exceed its current assets as at the current and previous year balance sheet date. These conditions indicate the existence of a material uncertainty that may cast significant doubt about the Company''s ability to continue as a "going concern". However, the financial results of the Company have been prepared on a going concern basis based on that the Company is actively negotiating with the ARC / lenders for one time settlement (OTS) and expecting the waiver of interest with the banks. As a result, not only the Company''s net worth will improve but also improve productivity on account of morale booster of the employees. Further, post OTS, Company will reduce the interest burden drastically and will be optimistic about reducing of accumulated losses gradually.

9. Since last many years the company does not have internal accruals from the operations and as a result, management do not anticipate execution of its ongoing project of Cold Rolling Mill (CRM) Plant. Since the capital project is not anticipated to complete in future, we have provided for the impairment loss for the amount of ''. 358.50 lacs to the statement of profit and loss during the current year which was earlier capitalized and carried in Capital work In Progress of our ongoing projects.

10. The company has entered into settlement agreement with effect from 15^th June 2015 and 11^th August 2015 for the entire dues in respect of the various facilities and assistance provided respectively by Union Bank of India and State bank of India which is now assigned to Invent Assets Securitization & Reconstruction Private Limited. The Company has accounted for the Principal Portion of Waiver of loan facilities as Capital Reserve and Waiver of interest as Income which has been offered in the Statement of Profit and Loss. The said agreements provides for the settlement of entire dues in respect of financial assistance and facilities with the underlying securities for the payment of Rs, 14,615.00 lacs towards full and final settlement against the total liability (Principal and Interest) of Rs, 60,734.85 lacs resulting into the waiver of liability (Principal and Interest) for the amount of Rs, 46,119.85 lacs.

Out of the said waiver of liability (Principal and Interest) for the amount of Rs, 46,119.85 lacs, the waiver of liability of Principal portion of Rs, 21,394.43 lacs has been shown as a capital Reserves in the Statement of Assets and Liabilities as at 31^st March 2016 and waiver of interest liability for Rs, 24,725.42 lacs has been offered as an Income in the Statement of profit and Loss and has been shown as an Extra ordinary item in the Results for the period ended 31^st March 2016.

11. The Company has re-classified previous year figures to conform to this year''s classification. Previous year figures have been re-arranged and re-grouped, wherever necessary to make them comparable with those of current year.

As per our report attached to the Balance Sheet

Signatures to Notes 1-43 The accompanying notes are an integral part of these financial statements.

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Mar 31, 2015

1.1 CORPORATE INFORMATION :

The company is engaged in manufacturing of wide range of Stainless Steel, Alloy & Special steel, Carbon/ Mild Steel and Armour Steel in Flat and Long products. It is one of the key suppliers to many renowned companies in India and overseas. It exports various products to more than 50 countries around the world. Company has been successful in developing protection Armour Steel which is mainly required for defense purpose. Company has been registered with Defense Research and Development Organization as approved vendor and it is expected that good business will be available to the company. To reduce the cost of power, company has been making efforts to purchase power through Open Access which would be cheaper than the present cost of power.

1.2 BASIS OF PREPARATION OF FINANCIAL STATEMENT:

The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of the Companies Act, 2013 ("the 2013 Act") / Companies Act, 1956 ("the 1956 Act"), as applicable. The financial statements have been prepared on accrual basis under the historical cost convention. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year.

All assets and liabilities have been classified as current or non-current as per the Company's normal operating cycle and other criteria set out in the Schedule III to the Companies Act, 2013. The Company's activities in its business segments have operating cycles which do not exceed 12 months. As a result, current assets comprise elements that are expected to be realized within 12 months after the reporting date and current liabilities comprise elements that are due for settlement within 12 months after the reporting date.

2. In the opinion of the Board of Directors, the current assets, loans and advances are approximately of the value stated, if realized in the ordinary course of business and the provisions for depreciation and all known and ascertained liabilities are adequate and not in excess of the amounts reasonably necessary.

3 Corporate Debt Restructuring (CDR) Cell through their lead bank, Union Bank of India had sanctioned a comprehensive debt restructuring scheme vide their letter No. BY.CDR (ABP) No. 1084 dated 22.1.2008. As per scheme company was supposed to make monthly payment of interest & installment by 1st October 2009. Looking to prevailing condition and reciprocal obligation not fulfilled by the CDR lenders & consequential losses incurred by the company in the year 2008, company had again approached CDR Cell for extension of moratorium period and CDR Cell had approved the rework proposal of the company vide their letter dated BY.CDR (ABP) NO.380/ 2009-10 dated 03-07-2009. The principal terms of the 2nd CDR Scheme and its compliances are as under:

(a) Deferring repayment of Term loan Rs. 1,56,05,13,132/- Working capital term loan Rs. 1,77,82,65,205/- and Non Convertible Debentures Rs. 1,00,00,00,000/- for another 20 months, (from original due date for repayment of 01.10.2009) i.e. up to 31.05.2011. Repayment shall start from June 2011 and end on May 2019.

(b) Interest for the moratorium period i.e. up to May 2011 shall be converted into Funded interest term loan (FITL) carrying interest rate of 6% p.a. repayable in 20 equal quarterly installments commencing from December 2013 quarter. Interest on FITL shall be serviced as and when due.

Consequent upon the sanction of the restructuring package, the company had to start repaying the aforesaid loans sanctioned by banks/institutions and debenture holders from June 2011 onwards however the company has made default in repaying the dues as per the terms stipulated in the CDR rework proposal. The Amount and the period of default in respect of Term Loan, WCTL , Non convertible Debentures and FITL are as under:

As per CDR Terms, Interest on Term Loan, Working capital term loan (WCTL) and Non convertible debentures (NCD) had to be parked up to May 2011 into a separate account called Funded Interest Term loan (FITL). However, from June 2011 onwards , the interest on Term Loan, Working capital term loan (WCTL) and Non convertible debentures(NCD) has to be serviced as and when due.

However, the company has defaulted in payment of interest on Term Loan, Working capital term loan (WCTL) and Non convertible debentures (NCD) . The Amount and the period of default are as listed under:

Further the company has stopped making provision for interest on such borrowing from the date of transfer due to non execution of agreement with Asset Reconstruction Companies (ARC) and hence due to non availability of agreement with Asset Reconstruction Companies (ARC) , the company has taken the CDR – 2 orders as base for classification of current / non-current liability and default of total borrowing.

4 The company had filed a reference with BIFR u/s 15(1) of the Sick Industrial Companies (Special Provision) Act, 1985. The Honorable BIFR vide its order number 13/2010 dated 31st August, 2010 has declared that the company has become sick industrial company u/s 3(1)(o) of SICA. [Sick Industrial Companies (Special Provision) Act, 1985].

5 Balances of Secured Loan, Unsecured Loans, Bank balances, Sundry debtors, Creditors and Loans and advances are subject to confirmation from respective parties.

6 Certain balance of Debtors, Loans and Advances and Creditors are non moving/ slow moving since long, however in view of the management the same is recoverable / payable and hence no provision for the same is made in the books of accounts.

7 The Company has long term investment in the shares of SAL Steel Limited total amount of Rs. 39,94,96,276/-. Based on the audited financial statement of SAL Steel Limited as at 31st March, 2015, the Company has accumulated losses and its net worth has been fully eroded. The Financial results of SAL Steel Limited also indicates that the Company has a net loss during the current and previous year and the Company's current liabilities exceeded its current assets as at the current and previous year balance sheet date. Also there is no movement in the prices of stock in share market. As per AS 13, all such circumstances indicate that there is decline, other than temporary, in the value of a long term investment. And as a result, we have provided investment at market rate of shares @ Rs. 1.75 per share total amount of Rs. 5,29,49,731/- and provided Rs. 34,65,46,545/- as diminution other than temporary in the value of investment in books of accounts.

8 A As at the year end the Company has accumulated losses and its net worth has been fully eroded. The Financial results indicate that the Company has net loss during the current and previous year and the Company's current liabilities exceed its current assets as at the current and previous year balance sheet date. These conditions indicate the existence of a material uncertainty that may cast significant doubt about the Company's ability to continue as a "going concern". However, the financial results of the Company have been prepared on a going concern basis based on that the Company is actively negotiating with the ARC / lenders for one time settlement (OTS) and expecting the waiver of interest with the banks. As a result, not only the Company's net worth will improve but also improve productivity on account of morale booster of the employees. Further, post OTS, Company will reduce the interest burden drastically and will be optimistic about vanishing of accumulated losses gradually.

9 Since last many years the company does not have internal accruals from the operations and as a result, management do not anticipate execution of its ongoing project of Cold Rolling Mill (CRM) Plant. Fund of Rs.18,31,84,363/- is blocked in the said ongoing projects. Since the capital project is not anticipate to complete in future, we have charged back expense of pre-operative expense, trial run expense and borrowing cost elements for Rs. 5,72,84,008/- to the statement of profit and loss during the current year which was earlier capitalized and carried in Capital work In Progress of our ongoing projects. For the remaining balance carried as Capital work In Progress, the company has not carried out any Techno-economic assessment during the year ended 31st March 2015 for the valuations of such Capital Projects and hence identification of impairment loss and provision thereof, if any, has not been made. Considering the emphasis of the matter, company agreed to appoint an approved valuer to access the impairment of the assets. We are expecting a report from the valuer and decision will be taken with regard to impairment, if any, on such assets.

10 Foreign currency exposure at the year end not hedged by derivative instruments:

11 The Company has re-classified previous year figures to conform to this year's classification. Previous year figures have been re-arranged and re-grouped, wherever necessary to make them comparable with those of current year as per revised Schedule-VI.

As per our report attached to the Balance Sheet Signatures to Notes 1-41

The accompanying notes are an integral part of these financial statements.

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Mar 31, 2013

1 1.1 CORPORATE INFORMATION

The company is engaged in manufacturing of wide range of Stainless Steel, Alloy & Special steel, Carbon/ Mild Steel and Armour Steel in Flat and Long products. It is one of the key suppliers to many renowned companies in India and overseas. It exports various products to more than 50 countries around the world. Company has been successful in developing protection Armour Steel which is mainly required for defense purpose. Company has been registered with Defense Research and Development Organization as approved vendor and it is expected that good business will be available to the company. To reduce the cost of power, company has been making efforts to purchase power through Open Access which would be cheaper than the present cost of power.

1.2 BASIS OF PREPARATION OF FINANCIAL STATEMENT

The Financial Statements are prepared as per historical cost convention and in accordance with the Generally Accepted Accounting Principles in India, the provisions of the Companies Act 1956 , and the applicable Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006. All Income and Expenditures having material bearing on the Financial Statements are recognized on accrual basis.

2. In the opinion of the Board of Directors, the current assets, loans and advances are approximately of the value stated, if realized in the ordinary course of business and the provisions for depreciation and all known and ascertained liabilities are adequate and not in excess of the amounts reasonably necessary.

3. Corporate Debt Restructuring (CDR) Cell through their lead bank, Union Bank of India had sanctioned a comprehensive debt restructuring scheme vide their letter No. BY.CDR (ABP) No. 1084 dated 22.1.2008. As per scheme company was supposed to make monthly payment of interest & installment by 01st October 2009. Looking to prevailing condition and reciprocal obligation not fulfilled by the CDR lenders & consequential losses incurred by the company in the year 2008, company had again approached CDR Cell for extension of moratorium period and CDR Cell had approved the rework proposal of the company vide their letter dated BY.CDR (ABP) NO.380/2009-10 dated 03-07-2009. The principal terms of the 2nd CDR Scheme and its compliances are as under :

a) Deferring repayment of Term loan Rs. 1,56,05,13,132/- Working capital term loan Rs. 1,77,82,65,205/- and Non Convertible Debentures Rs. 1,00,00,00,000/- for another 20 months, (from original due date for repayment of 01.10.2009) i.e. up to 31.05.2011. Repayment shall start from June 2011 and end on May 2019.

b) Interest for the moratorium period i.e. up to May 2011 shall be converted into Funded interest term loan (FITL) carrying interest rate of 6% p.a. repayable in 20 equal quarterly installments commencing from December 2013 quarter. Interest on FITL shall be serviced as and when due.

Consequent upon the sanction of the restructuring package, the company had to start repaying the aforesaid loans sanctioned by banks/institutions and debenture holders from June 2011 onwards however the company has made default in repaying the dues as per the terms stipulated in the CDR rework proposal. The Amount and the period of default in respect of Term Loan, WCTL and Non convertible Debentures are as under :

4. The company had filed a reference with BIFR u/s 15(1) of the Sick Industrial Companies (Special Provision) Act, 1985. The Honorable BIFR vide its order number 13/2010 dated 31st August, 2010 has declared that the company has become sick industrial company u/s 3(1)(o) of SICA. [Sick Industrial Companies (Special Provision) Act, 1985]

5. Balances of Secured Loan, Unsecured Loans, Bank balances, Sundry debtors, Creditors and Loans and advances are subject to confirmation from respective parties.

6. Certain balance of Debtors, Loans and Advances and Creditors are non moving/ slow moving since long, however in view of the management the same is recoverable / payable and hence no provision for the same is made in the books of accounts.

7. Foreign currency exposure at the year end not hedged by derivative instruments :

8. The company had entered into a power purchase agreement with SAL Steel Limited on February 21st 2006 which enunciates minimum guarantee and uninterrupted supply of power. In pursuance of this contract during the last financial year 2011- 12, Shah Alloys Limited has incurred an expense of short lifting of power from SAL Steel limited due to which the results of the company are not comparable to the extent of Rs. 31,09,85,750/-. This expense of short lifting of power from SAL Steel Limited is included in Power expense.

9. The Company has re-classified previous year figures to conform to this year''s classification. Previous year figures have been re-arranged and re-grouped, wherever necessary to make them comparable with those of current year as per revised Schedule-VI.

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Mar 31, 2012

1 1.1 CORPORATE INFORMATION :

The company is engaged in manufacturing of wide range of Stainless Steel, Alloy & Special steel, Carbon/Mild Steel and Armour Steel in Flat and Long products. Its is is one of the key suppliers to many renowned companies in India and overseas. It exports various products to more than 50 countries around the world. Company has been successful in developing protection Armour Steel which is mainly required for defense purpose. Company has been registered with Defense Research and Development Organization as approved vendor and it is expected that good business will be available to the company. To reduce the cost of power, company has been making efforts to purchase power through Open Access which would be cheaper than the present cost of power.

1.2 BASIS OF PREPARATION OF FINANCIAL STATEMENT:

The Financial Statements are prepared as per historical cost convention and in accordance with the Generally Accepted Accounting Principles in India, the provisions of the Companies Act 1956 , and the applicable Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006. All Income and Expenditures having material bearing on the Financial Statements are recognized on accrual basis.

Note 2: SHARE CAPITAL

b) Rights, Preferences and restrictions attached to shares

Equity Shares

The company has one class of equity share having a par value of Rs. 10 each. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of directors is subject to the approval of shareholders in the ensuing Annual general meeting, except in case of interim dividend. In the case of liquidation, the equity shareholders are eligible to receive the remaining assets of the company after distribution of all preferential amounts, in proportion to their shareholding.

Note 3: LONG TERM BORROWINGS

(A) SECURED :

a) Nature of security and terms of repayment for secured borrowings I) Non Convertible Debentures

First Mortgage and charge on the company's all immovable and movable properties (other than working capital assets), both present and future, ranking pari-passu with all term lenders. Second charges on Working Capital assets of the company. Pledge of promoter's entire shareholding ranking pari passu with all Corporate Debts Restructuring lenders. Unconditional and irrevocable personal guarantee of the promoter-director Shri Rajendra Shah.

Non Convertible Debentures is repayable in equal monthly installment starting from June 2011 till May 2019.

b) Period and Amount of default as on the Balance sheet

During the year 2011-12 as per the terms of the CDR, Principal amount of Non Convertible Debentures were due for repayment amounting Rs. 10,41,66,667/- and Interest amounting to Rs. 8,18,90,411/- However the company has defaulted in repayment of Principal amount as well as the interest on the same. The default is subsisting for a period from 91-366 days.

II) Term Loan from Bank/Financial Institution:

First Mortgage and charge on the company's all immovable and movable properties (other then working capital assets), both present and future, ranking pari-passu with all term lenders. (except Punjab National Bank's Corporate loan which has exclusive charge on 26,00,000 shares of Shah Alloys Limited. Thus First charge on fixed assets is not extended to Punjab national bank over the Corporate loan) Second charges on WC assets of the company. Pledge of promoter's entire shareholding ranking pari passu with all CDR lenders except for 26,00,000 shares on which Punjab national bank has exclusive charge . Unconditional and irrevocable personal guarantee of the promoter-director Shri Rajendra Shah.

Term Loan is repayable in equal monthly installment starting from June 2011 till May 2019.

(B) UNSECURED :

Loan from Directors

Loans from Director are interest free. The amount of loan is repayable after a period of 1 year from the date of Balance Sheet.

Note 4 : SHORT TERM BORROWINGS

a) Nature of security and terms of repayment for secured borrowings Cash Credit Facilities

Hypothecation first charges on company's entire stocks of raw material, stock in progress, finished goods, book debts/receivables and all current assets stored in the company's factory premises, at all plants and/or elsewhere including those in transit covered by documents of title thereto, local and export usance bill ranking pari-passu in favor of all the working capital banks. Second charge on the entire movable and immovable assets both present and future on pari-passu basis. Pledge of promoter's entire shareholding ranking pari-passu with all CDR lenders. Unconditional and irrevocable personal guarantee of the promoter-director Shri Rajendra Shah.

Note 5: CONTINGENT LIABILITIES AND COMMITMENTS (to the extent not provided for) As At As At March 31, 2012 March 31, 2011

Contingent Liabilities

(a) Claims against the company not acknowledged as debts

- Claim by Parties 273 42 22 336 23 68 54 000

(b) Guarantees

- Corporate guarantee given to consortium Banks for SAL Steel Ltd. 207 50 00 000 207 50 00 000

- Corporate guarantee given to ABN AMRO Bank for SAL Steel Ltd. 0 2 25 00 000

- Corporate guarantee given to Banks for Adarsh foundation 0 10 00 00 000

- Bank guarantee given 2 00 82 313 2 51 02 471

- Corporate Guarantee given to L&T for Atithi Gokul 0 22 80 000

(c) Other money for which the company is contingently liable

- Disputed Income Tax Demand (net of Payment) 1 30 000 1 30 000

- Disputed sales tax demand (net of Advance) 38 04 35 702 4 13 25 791

- Disputed matter with excise and service tax 1 31 97 095 1 31 97 095

Note 6: RELATED PARTY DISCLOSURES

As per Accounting Standard 18, the disclosures of transactions with the related parties are given below:

i) Concern where significant interest exists.

Sl. Name of the Concern Nature of Relationship No.

1 SAL Steel Limited Associate

2 SAL Pharmacy (A Division of SAL Corporation Pvt. Ltd.) Enterprise with significant influence

3 Adarsh Foundation Enterprise with significant influence

4 SAL Hospital & Medical Enterprise with significant Institute (A Division of influence SAL Care Pvt Ltd.)

5 Kesar SAL Hospital (A Enterprise with significant Division of Adarsh Foundation) influence



ii) Key Management Personnel and Relatives

1 Mr. Rajendra V. Shah Chairman

2 Mr. K. S. Kamath Jt. Managing Director

3 Mr. Bhupendra T. Jha Jt. Managing Director (Ceased from 08/07/2010)

7 In the opinion of the Board of Directors, the current assets, loans and advances are approximately of the value stated, if realized in the ordinary course of business and the provisions for depreciation and all known and ascertained liabilities are adequate and not in excess of the amounts reasonably necessary.

8 Corporate Debt Restructuring (CDR) Cell through their lead bank, Union Bank of India had sanctioned a comprehensive debt restructuring scheme vide their letter No. BY.CDR (ABP) No. 1084 dated 22.1.2008. As per scheme company was supposed to make monthly payment of interest & installment by 1st October 2009. Looking to prevailing condition & losses incurred by the company in the year 2008, company had again approached CDR Cell for extension of moratorium period and CDR Cell had approved the rework proposal of the company vide their letter dated BY.CDR (ABP) NO.380/2009-10 dated 03-07-2009. The principal terms of the 2nd CDR Scheme and its compliances are as under:

a) Deferring repayment of Term loan Rs. 1,56,05,13,132/- Working capital term loan Rs. 1,77,82,65,205/- and Non Convertible Debentures Rs. 1,00,00,00,000/- for another 20 months, (from original due date for repayment of 01.10.2009) i.e. up to 31.05.2011. Repayment shall start from June 2011 and end on May 2019.

b) Interest for the moratorium period i.e. up to May 2011 shall be converted into Funded interest term loan (FITL) carrying interest rate of 6% p.a. repayable in 20 equal quarterly installments commencing from December 2013 quarter. Interest on FITL shall be serviced as and when due.

c) Rate of interest on Term Loan, Non Convertible Debenture and WCTL will be 10% p.a. for the term lenders who are presently charging more than 10% p.a. payable monthly. Existing rates will continue for those lenders who are charging less than 10% p.a. payable monthly and FITL will carry interest at the rate of 6 percent per annum.

d) The company had extended an inter corporate loan of Rs. 95,00,00,000/- to SAL Steel Limited in earlier years out of which at present, the balance outstanding is Rs. 80,00,00,000/-. The terms of the Repayment of the same amount of is Rs. 10,00,00,000/- in FY 2012, Rs. 20,00,00,000/- each in FY 2013 to 2015 and Rs. 10,00,00,000/- in FY 2016. The company shall make all efforts to bring back the amount faster. The Monitoring committee shall monitor the same on half yearly basis.

As per the terms of the CDR, the company had to recover Rs. 10,00,00,000/- in FY 2012 from SAL Steel Ltd. However, the company has not received/recovered the same from SAL Steel Ltd.

e) As per the terms of the CDR, the company has brought in Promoters' contribution during the year 2009-10.

9 The company had filed a reference with BIFR u/s 15(1) of the Sick Industrial Companies (Special Provision) Act, 1985. The Honorable BIFR vide its order number 13/2010 dated 31st August, 2010 has declared that the company has become sick industrial company u/s 3(1)(o) of SICA. (Sick Industrial Companies (Special Provision) Act, 1985)

10 Balances of Unsecured Loans, bank balances, Sundry debtors, Creditors and Loans and advances are subject to confirmation from respective parties.

11 Certain balance of Debtors, Loans and Advances and Creditors are non moving/slow moving since long, however in view of the management the same is recoverable/payable and hence no provision for the same is made in the books of accounts.

12 The company had entered into a power purchase agreement with SAL Steel Limited on February 21, 2006 which enunciates minimum guarantee and uninterrupted supply of power. In pursuance of this contract during the year, Shah Alloys Limited has incurred an expense of short lifting of power from SAL Steel limited amounting Rs. 31,09,85,750/- since the date of the agreement. This expense of short lifting of power from SAL Steel Limited is included in Power expense.

13 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. The Company has re-classified previous year figures to conform to this year's classification. Previous year figures have been re-arranged and re-grouped, wherever necessary to make them comparable with those of current year as per revised Schedule-VI.

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Mar 31, 2010

1. (a) Estimated amount of contracts remaining to be executed on capital account [net of advances] and not provided for Rs. 67.90 lacs [P.Y. Rs.67.90 lacs].

(b) Contingent Liability/Asset not Provided for in respect of :

Particular Amount Amount ( Rs in Lacs) ( Rs in Lacs) 31-03-2010 31-03-2009

Inland Letters of credit. 1784.20 863.71

Foreign Letters of credit. 2033.88 532.60

Disputed Income Tax Demand (net of Payment) 306.46 620.53

Disputed sales tax demand ( net of Advance) 6.98 6.98

Disputed service tax demand 41.63 41.63

Disputed Excise Cenvat demand 10.98 -

Corporate guarantee given to consortium 20750.00 20750.00

Banks for SAL Steel Ltd.

Corporate guarantee given to ABNAMRO 225.00 225.00

Bank for SAL Steel Ltd.

Corporate guarantee given to Bank for 1000.00 1000.00

Adarsh foundation

Bank guarantee given 239.03 167.86

Claim by Supplier (Quadrant EppSurlon (I) Ltd.) 2.28 2.28

Claim by GEB 240.41 585.00

Corporate Guarantee given to L&T for Athiti Gokul 22.80 22.80

2. In the opinion of the Board of Directors, the current assets, loans and advances are approxi- mately of the value stated, if realized in the ordinary course of business and the provisions for depreciation and all known and ascertained liabilities are adequate and not in excess of the amounts reasonably necessary.

3. As on 31st March 2010 accumulated losses exceeds the paid up capital and free reserve, since the total erosion of net-worth has taken place the company has become a " Sick Industrial company" within the meaning of Sec3(l)(o) of the sick industrial companies (Special Provision) act 1985. The company has made intimation to the Board of Industrial and Financial Recon- struction (BIFR) for erosion of more than fifty Percent of the net worth.

4. Corporate Debt Restructuring (CDR) Cell through their lead bank, Union Bank of India has sanctioned a comprehensive debt restructuring scheme vide their letter No. BY.CDR (ABP) No. 1084 dated 22.1.2008. As per scheme company is supposed to make monthly payment of interest & installment by 01st October 2009.

Looking to prevailing condition & losses incurred by the company in the year 2008, company had again approached CDR Cell for extension of moratorium period and CDR Cell has approved the rework proposal of the company vide their letter dated BY.CDR (ABP) NO.318/2009-10 dated 25.06.2009. The principal terms of the 2nd CDR Scheme are as under:

(a) Deferring repayment of Term loan (Rs 156.05 Crore), WCTL (Rs. 177.83 Crores) and Non Convertible Debentures (Rs. 100 Crores) for another 20 months,( from original due date for repayment of 01.10.2009) i.e. up to 31.05.2011. Repayment shall start from June 2011 and ending on May 2019.

(b) Interest for the moratorium period i.e. up to May 2011 shall be converted into FITL carrying interest rate of 6% p.a., repayable in 20 equal quarterly installments commenc- ing from December 2013 quarter. Interest on FITL shall be serviced as and when due.

(c) Rate of interest on Term Loan, Non Convertible Debenture and WCTL will be 10 % p.a. for the term lenders who are presently charging more than 10 percent per annum payable monthly. Existing rates will continue for those lenders who are charging less than 10 percent per annum payable monthly and FITL will carry interest at the rate of 6 percent per annum.

(d) As per the terms of the CDR, the company has brought in Promoters contribution during the year.

(e) Deferment in repatriation of balances ICDs of Rs. 80 crores by two years from the date of revised CDR sanction.

5. Balances of Unsecured Loans, bank balances, Sundry debtors, Creditors and Loans and ad- vances are subject to confirmation from respective parties.

6. The Company, in September 2006, has raised US $ 10 million through Unsecured Zero Coupon Foreign Currency Convertible Bonds (FCCB), due in 2011.On full conversion of FCCB, the FCCB will be converted in to 26,41,143 Equity shares of Rs 10 each at a premium of Rs 165 per share, at the option of the Bondholders at any time before the maturity of the bonds. On Conversion Capital will increase by Rs 2.64 Crores and Share Premium by Rs 43.58 Crores. If Bonds are not converted the company will have to repay the bonds at a premium & in US Dollars. The company has provided the premium for this year, which has been adjusted against Security Premium in accordance with Section 78 of Companies Act, 1956.

7. Inventories are as taken, valued and certified by the Director.

8. In absence of the complete information regarding the status of the suppliers as micro small or medium enterprise as per the micro small and medium enterprise development act 2006, the information regarding the amount due to such parties as on the balance sheet date and provision for interest if any required by the said act is not been made.

9. Certain balance of Debtors, Loans and Advances and Creditors are nonmoving /slow moving since long, however in view of the management same is recoverable/payable and hence no provision for the same is made in the books of accounts.

10. Previous years figures have been re-organised/rearranged wherever necessary so as to confirm with current years groupings.

11. Information required in terms of part IV to Schedule VI to the Companies Act, 1956 is attached.