Notes to Accounts of Sterling Tools Ltd.

Mar 31, 2025

(5) Provisions and contingent liabilities and contingent
assets

A provision is recognised if, as a result of a past event, the
Company has a present legal or constructive obligation
that can be estimated reliably, and it is probable that an

outflow of economic benefits will be required to settle
the obligation. If the effect of the time value of money is
material, provisions are determined by discounting the
expected future cash flows at a pre-tax rate that reflects
current market assessments of the time value of money
and the risks specific to the liability. When discounting is
used, the increase in the provision due to the passage of
time is recognised as a finance cost.

The amount recognised as a provision is the best
estimate of the consideration required to settle the
present obligation at reporting date, taking into account
the risks and uncertainties surrounding the obligation.

When some or all of the economic benefits required to
settle a provision are expected to be recovered from a third
party, the receivable is recognised as an asset if it is virtually
certain that reimbursement will be received and the amount
of the receivable can be measured reliably. The expense
relating to a provision is presented in the standalone
statement of profit and loss net of any reimbursement.

Contingent liabilities are possible obligations that
arise from past events and whose existence will only
be confirmed by the occurrence or non-occurrence
of one or more future events not wholly within the
control of the Company. Where it is not probable that
an outflow of economic benefits will be required, or the
amount cannot be estimated reliably, the obligation is
disclosed as a contingent liability, unless the probability
of outflow of economic benefits is remote. Contingent
liabilities are disclosed on the basis of judgment of
the management/independent experts. These are
reviewed at each balance sheet date and are adjusted
to reflect the current management estimate.

Contingent assets are not recognised in the standalone
financial statements.

(6) Government grants

Grants from government are recognised when
there is reasonable assurance that the grant will be
received and the Company will comply with all the
attached conditions.

When the grant relates to a revenue item, it is recognised
in standalone statement of profit and loss on a
systematic basis over the periods in which the related
costs are expensed. The grant can either be presented
separately or can deduct from related reported expense.

Government grant relating to capital assets is recognised
initially as deferred income and are credited to standalone
statement of profit and loss on a straight line basis over
the expected lives of the related asset and presented as
other operating income within revenue from operations.

(7) Foreign currency transactions and translation

Transactions in foreign currencies are initially recorded
at the functional currency spot rates at the date the
transaction first qualifies for recognition.

Monetary assets and liabilities denominated in
foreign currencies are translated at the functional
currency spot rates of exchange at the reporting
date. Exchange differences arising on settlement or
translation of monetary items are recognised in the
standalone statement of profit and loss in the year in
which it arises.

Non-monetary items that are measured in terms of
historical cost in a foreign currency are translated
using the exchange rate at the date of the transaction.

The Company uses derivative financial instruments,
such as forward currency contracts to hedge its
foreign currency risks in respect of its imports and
exports. Such derivative financial instruments are
initially recognised at fair value on the date on which a
derivative contract is entered into and are subsequently
re-measured at fair value. Derivatives are carried as
financial assets when the fair value is positive and as
financial liabilities when the fair value is negative. Any
gains or losses arising from changes in the fair value
of derivatives are taken to the standalone statement of
profit and loss.

(8) Revenue

The Company recognises revenue from the
following major sources:

Sale of products (including scrap sales)

Revenue from sale of products (including scrap sales)
is measured based on the consideration specified in a
contract with a customer and excludes amounts collected
on behalf of third parties. It is measured at the amount
of transaction price, net of returns and allowances, trade
discounts and volume rebates. The Company recognises
revenue when it transfers control over a product to a
customer i.e. when goods are delivered at the delivery
point, as per terms of the agreement, which could be
either customer premises or carrier premises who will
deliver goods to the customer. When payments received
from customers exceed revenue recognised to date on
a particular contract, any excess (a contract liability) is
reported in the standalone Balance Sheet under other
current liabilities (see note 27).

Satisfaction of performance obligations

The Company''s revenue is derived from the single
performance obligation to transfer primarily products
under arrangements in which the transfer of control

of the products and the fulfilment of the Company''s
performance obligation occur at the same time.
Revenue from the sale of goods is recognised when
the Company has transferred control of the goods
to the buyer and the buyer obtains the benefits from
the goods, the potential cash flows and the amount
of revenue (the transaction price) can be measured
reliably, and it is probable that the Company will
collect the consideration to which it is entitled to in
exchange for the goods.

Whether the customer has obtained control over the
asset depends on when the goods are made available
to the carrier or the buyer takes possession of the
goods, depending on the delivery terms.

Payment terms

The sale of goods is typically made under credit -
payment terms differing from customer to customer
and ranges between 0-60 days.

Variable considerations associated with such sales

Periodically, the Company enters into volume or
other rebate programs where once a certain volume
or other conditions are met, it gives the customer
as volume discount some portion of the amounts
previously billed or paid. For such arrangements, the
Company only recognises revenue for the amounts it
ultimately expects to realise from the customer. The
Company estimates the variable consideration for
these programs using the most likely amount method
or the expected value method, whichever approach
best predicts the amount of the consideration based
on the terms of the contract and available information
and updates its estimates each reporting period.

Contract assets and contract liabilities

The Company recognises contract liabilities for
consideration received in respect of unsatisfied
performance obligations and reports these amounts
as other liabilities in the standalone balance sheet.
Similarly, if the Company satisfies a performance
obligation before it receives the consideration, the
Company recognises either a contract asset or a
receivable in its standalone balance sheet, depending
on whether something other than the passage of time
is required before the consideration is due.

A contract asset is the right to consideration in
exchange for goods or services transferred to the
customer. If the Company performs by transferring
goods or services to a customer before the customer
pays consideration or before payment is due, a contract
asset is recognised for the earned consideration
when that right is conditional on Company''s future

performance. A contract liability is the obligation to
transfer goods or services to a customer for which the
Company has received consideration (or an amount of
consideration is due) from the customer. If a customer
pays consideration before the Company transfers
goods or services to the customer, a contract liability is
recognised when the payment is made or the payment
is due (whichever is earlier). Contract liabilities are
recognised as revenue when the Company performs
under the contract. The Company does not expect
to have any contracts where the period between the
transfer of the promised goods or services to the
customer and payment by the customer exceeds
one year. As a consequence, the Company does
not adjust any of the transaction prices for the time
value of money.

Trade receivables

Trade receivables are amounts due from customers
for goods sold in the ordinary course of business
and reflects Company''s unconditional right to
consideration (that is, payment is due only on the
passage of time). Trade receivables are recognised
initially at the transaction price as they do not contain
significant financing components. The Company
holds the trade receivables with the objective of
collecting the contractual cash flows and therefore
measures them subsequently at amortised cost using
the effective interest method, less loss allowance.

Transfer of trade receivables

The Company transfers certain trade receivables
under bill discounting arrangements with banks. These
transferred receivables do not qualify for derecognition
as the Company retains the credit risk with respect
to these transferred receivables due to the existence
of the recourse arrangement. Consequently, the
proceeds received from such transfers with recourse
arrangements are recorded as borrowings from banks
and classified under current borrowings.

(9) Other income

Interest income from financial assets is recognised,
when no significant uncertainty as to measurability
or collectability exists, on a time proportion basis
taking into account the amount outstanding and the
applicable interest rate, using the effective interest
rate method (EIR).

(10) Employee benefits

10.1 Short term employee benefits

Short- term employee benefit obligations are
measured on an undiscounted basis and are
expensed as the relative service is provided. A

liability is recognised for the amount expected
to be paid e.g., under short-term cash bonus, if
the Company has a present legal or constructive
obligation to pay this amount as a result of
past service provided by the employee, and the
amount of obligation can be estimated reliably.

10.2 Defined contribution plan

A defined contribution plan is a post-employment
benefit plan under which an entity pays fixed
contributions into separate entities and will
have no legal or constructive obligation to pay
further amounts. Obligations for contributions
to defined contribution plans are recognised as
an employee benefits expense in the standalone
statement of profit and loss in the period during
which services are rendered by employees.

The Company pays fixed contribution to
government administered provident fund scheme
at predetermined rates. The contributions to the
fund for the year are recognised as expense
and are charged to the standalone statement of
profit and loss.

10.3 Defined benefit plan

A defined benefit plan is a post-employment
benefit plan other than a defined contribution
plan. The Company''s liability towards gratuity is
in the nature of defined benefit plan.

The Company''s net obligation in respect of
defined benefit plan is calculated separately
by estimating the amount of future benefit
that employees have earned in return for their
service in the current and prior periods; that
benefit is discounted to determine its present
value. Any unrecognised past service costs are
deducted. The discount rate is based on the
prevailing market yields of Indian government
securities as at the reporting date that have
maturity dates approximating the terms of the
Company''s obligations and that are denominated
in the same currency in which the benefits are
expected to be paid.

The liability recognised in the standalone
balance sheet for defined benefit plans is the
present value of the defined benefit obligation
(DBO) at the reporting date less the fair value
of plan assets.

The calculation is performed annually by a
qualified actuary using the projected unit credit
method. When the calculation results in a benefit
to the Company, the recognised asset is limited to

the total of any unrecognised past service costs.
Any actuarial gains or losses are recognised in
other comprehensive income in the period in
which they arise.

10.4 Other long-term employee benefits

Benefits under the Company''s leave encashment
constitute other long-term employee benefit.

The employees can carry forward a portion of the
unutilised accrued compensated absences and
utilise it in future service periods or receive cash
compensation on termination of employment.
The liabilities for leave balance are not expected
to be settled wholly within 12 months after the
end of the period in which the employees render
the related service. The benefit is discounted to
determine its present value. The discount rate is
based on the prevailing market yields of Indian
government securities as at the reporting date
that have maturity dates approximating the terms
of the Company''s obligations. The obligation is
measured on the basis of independent actuarial
valuation using the projected unit credit method.

The obligations are presented as non current
liabilities in the standalone balance sheet as the
entity has a right to defer the settlement for at
least twelve months after the reporting period.

(11) Share based payments

The Company recognises compensation expense
relating to share based payments in accordance with
Ind AS 102, ''Share-based payment''. Stock options
granted by the Company to its employees and
employees of the subsidiaries are accounted as equity
settled options. In respect of the options granted to the
employees of the Company, the estimated fair value
of options granted that is determined on the date of
grant, is charged to standalone statement of profit and
loss on a straight-line basis over the vesting period
of options, with a corresponding increase in equity.
The total amount to be expensed is determined by
reference to the fair value of the options granted:

(i) including any market performance conditions

(ii) excluding the impact of any service and non¬
market performance vesting conditions

(iii) including the impact of any non-vesting conditions

In respect of the options granted to the employees of
the subsidiary companies, the estimated fair value of
options granted that is determined on the date of grant,
is considered investment in the subsidiary company,

on a straight-line basis over the vesting period of
options, with a corresponding increase in equity.

At the end of each period, the entity revises its
estimates of the number of options that are expected
to vest based on the non-market vesting and service
conditions. It recognises the impact of the revision
to original estimates, if any, in profit or loss, with
corresponding adjustment to equity.

(12) Lease

Company as a lessee

The Company''s lease asset classes primarily consist
of property leases. The Company assesses whether a
contract contains a lease, at inception of a contract. A
contract is, or contains, a lease if the contract conveys
the right to control the use of an identified asset for a
period of time in exchange for consideration. To assess
whether a contract conveys the right to control the use
of an identified asset, the Company assesses whether:

(i) the contract involves the use of an identified asset;

(ii) the Company has substantially all of the
economic benefits from use of the asset through
the period of the lease; and

(iii) the Company has the right to direct the
use of the asset.

At the date of commencement of the lease, the
Company recognises a right-of-use asset ("ROU”) and a
corresponding lease liability for all lease arrangements in
which it is a lessee, except for leases with a term of twelve
months or less (short-term leases) and low value leases.
For these short-term and low value leases, the Company
recognises the lease payments as an operating expense
on a straight-line basis over the term of the lease.

Certain lease arrangements include the options to extend
or terminate the lease before the end of the lease term.
ROU assets and lease liabilities includes these options
when it is reasonably certain that they will be exercised.

The right-of-use assets are initially recognised at cost, which
comprises the initial amount of the lease liability adjusted for
any lease payments made at or prior to the commencement
date of the lease plus any initial direct costs less any lease
incentives. They are subsequently measured at cost less
accumulated depreciation and impairment losses.

Right-of-use assets are depreciated from the
commencement date on a straight-line basis over the shorter
of the lease term and useful life of the underlying asset.

The lease liability is initially measured at amortised cost
at the present value of the future lease payments. The

lease payments are discounted using the interest rate
implicit in the lease or, if not readily determinable, using
the incremental borrowing rates in the country of domicile
of these leases. Lease liabilities are re-measured with
a corresponding adjustment to the related right-of-use
asset if the Company changes its assessment if whether
it will exercise an extension or a termination option.

(13) Taxes on income

Income-tax expense comprises current and deferred
tax. Current tax expense is recognised in the
standalone statement of profit and loss except to the
extent that it relates to items recognised directly in
other comprehensive income or equity, in which case it
is recognised in other comprehensive income or equity.

Current tax is the expected tax payable on the
taxable income for the year, using tax rates enacted
or substantively enacted and as applicable at the
reporting date, and any adjustment to tax payable in
respect of previous years.

Deferred tax is recognised using the balance sheet
method, providing for temporary differences between
the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used
for taxation purposes. Deferred tax is measured at the
tax rates that are expected to be applied to temporary
differences when they reverse, based on the laws that
have been enacted or substantively enacted by the
reporting date. Deferred tax assets and liabilities are
offset if there is a legally enforceable right to offset
current tax liabilities and assets, and they relate to
income taxes levied by the same tax authority.

Deferred tax is recognised in the standalone statement
of profit and loss except to the extent that it relates
to items recognised directly in other comprehensive
income or equity, in which case it is recognised in other
comprehensive income or equity.

A deferred tax asset is recognised to the extent that it
is probable that future taxable profits will be available
against which the temporary difference can be utilised.
Deferred tax assets are reviewed at each reporting
date and are reduced to the extent that it is no longer
probable that the related tax benefit will be realised.

(14) Segment reporting

In accordance with Ind AS 108, the operating segments
used to present segment information are identified on
the basis of internal reports used by the Company''s
management to allocate resources to the segments
and assess their performance. The Board of Directors
is collectively the Company''s ''Chief Operating Decision
Maker'' or ''CODM'' within the meaning of Ind AS 108.

(15) Equity investments

Equity investments in joint venture and subsidiaries
are measured at cost. The investments are reviewed
at each reporting date to determine whether there
is any indication of impairment considering the
provisions of Ind AS 36 ''Impairment of Assets''. If any
such indication exists, policy for impairment of non¬
financial assets is followed.

(16) Financial instruments

A financial instrument is any contract that gives rise to
a financial asset of one entity and a financial liability or
equity instrument of another entity.

16.1 Financial assets

Initial recognition and measurement

All financial assets are recognised initially at
fair value. Transaction costs that are directly
attributable to the acquisition or issue of
financial assets (other than financial assets at
fair value through profit or loss) are added to
or deducted from the fair value of the financial
assets, as appropriate, on initial recognition.
However, trade receivables that do not contain a
significant financing component are measured
at transaction price in accordance with Ind AS
115. Transaction costs of financial assets carried
at fair value through profit or loss are expensed in
the standalone statement of profit and loss.

Subsequent measurement

(i) Financial assets carried at amortised cost

A financial asset is subsequently measured
at amortised cost if it is held within a
business model whose objective is to hold
the asset in order to collect contractual
cash flows and the contractual terms of the
financial asset give rise on specified dates
to cash flows that are solely payments
of principal and interest on the principal
amount outstanding.

(ii) Financial assets at fair value through other
comprehensive income (FVOCI)

A financial asset is subsequently measured
at fair value through other comprehensive
income if it is held within a business model
whose objective is achieved by both collecting
contractual cash flows and selling financial
assets and the contractual terms of the financial
asset give rise on specified dates to cash flows
that are solely payments of principal and
interest on the principal amount outstanding.

(iii) Financial assets at fair value through profit
or loss (FVTPL)

A financial asset which is not classified in any
of the above categories are subsequently
fair valued through profit or loss.

Derecognition

A financial asset (or, where applicable,
a part of a financial asset or part of a
Company of similar financial assets) is
primarily derecognised (i.e. removed from
the Company''s balance sheet) when:

• The right to receive cash flows from
the asset have expired, or

• The Company has transferred its rights
to receive cash flows from the asset
or has assumed an obligation to pay
the received cash flows in full without
material delay to a third party under
a ''pass-through'' arrangement and
either (a) the Company has transferred
substantially all the risks and rewards of
the asset, or (b) the Company has neither
transferred nor retained substantially all
the risks and rewards of the asset, but
has transferred control of the asset.

Impairment of financial assets

In accordance with Ind AS 109, the
Company use forward-looking information
to recognise expected credit losses (ECL)
model'' for measurement and recognition of
impairment loss on the following financial
assets and credit risk exposure:

(a) Financial assets that are debt
instruments, and are measured
at amortised cost e.g., loans, debt
securities, deposits, trade receivables
and bank balance.

(b) Trade receivables using the lifetime
expected credit loss model.

For recognition of impairment loss on other
financial assets and risk exposure, the
Company determines that whether there
has been a significant increase in the credit
risk since initial recognition. If credit risk
has not increased significantly, 12-month
ECL is used to provide for impairment
loss. However, if credit risk has increased
significantly, lifetime ECL is used. If, in a

subsequent period, credit quality of the
instrument improves such that there is no
longer a significant increase in credit risk
since initial recognition, then the entity
reverts to recognising impairment loss
allowance based on 12-month ECL.

The presumption under Ind AS 109 with
reference to significant increases in credit
risk since initial recognition (when financial
assets are more than 30 days past due), has
been rebutted and is not applicable to the
company, as the company is able to collect
a significant portion of its receivables that
exceed the due date.

16.2 Financial liabilities

Initial recognition and measurement

Financial liabilities are classified, at initial
recognition, as financial liabilities at fair value
through profit or loss, borrowings, payables, or as
derivatives designated as hedging instruments in
an effective hedge, as appropriate. All financial
liabilities are recognised initially at fair value
and, in the case of borrowings and payables,
net of directly attributable transaction costs.
The Company''s financial liabilities include trade
and other payables, borrowings and derivative
financial instruments.

Subsequent measurement

The measurement of financial liabilities depends
on their classification, as described below:

Financial liabilities at amortised cost

After initial measurement, such financial liabilities
are subsequently measured at amortised cost
using the EIR method. Gains and losses are
recognised in the standalone statement of profit
and loss when the liabilities are derecognised as
well as through the EIR amortisation process.
Amortised cost is calculated by taking into account
any discount or premium on acquisition and fees
or costs that are an integral part of the EIR. The
EIR amortisation is included in finance costs in
the standalone statement of profit and loss. This
category generally applies to borrowings, trade
payables and other contractual liabilities.

Derecognition

A financial liability is derecognised when the
obligation under the liability is discharged or
cancelled or expires. When an existing financial
liability is replaced by another from the same

lender on substantially different terms, or the terms
of an existing liability are substantially modified,
such an exchange or modification is treated as
the derecognition of the original liability and the
recognition of a new liability. The difference in the
respective carrying amounts is recognised in the
standalone statement of profit and loss.

16.3 Offsetting

Financial assets and liabilities are offset and the
net amount is reported in the standalone balance
sheet where there is a legally enforceable right
to offset the recognised amounts and there is
an intention to settle on a net basis or realise the
asset and settle the liability simultaneously. The
legally enforceable right must not be contingent
on future events and must be enforceable in the
normal course of business and in the event of
default, insolvency or bankruptcy of the Company
or the counterparty.

D. Significant accounting judgments, estimates and
assumptions

The preparation of standalone financial statements requires
management to make judgments, estimates and assumptions
that may impact the application of accounting policies and the
reported value of assets, liabilities, income, expenses and related
disclosures concerning the items involved as well as contingent
assets and liabilities at the balance sheet date. The estimates
and management''s judgments are based on previous experience
and other factors considered reasonable and prudent in the
circumstances. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on
an ongoing basis. Revisions to accounting estimates are
recognised in the period in which the estimates are revised
and in any future periods affected.

In order to enhance understanding of the standalone financial
statements, information about significant areas of estimation,
uncertainty and critical judgments in applying accounting
policies that have the most significant effect on the amounts
recognised in the standalone financial statements is as under:

(1) Recognition of deferred tax assets

The extent to which deferred tax assets can be
recognised is based on an assessment of the
probability of the Company''s future taxable income
(supported by reliable evidence) against which the
deferred tax assets can be utilised.

(2) Contingent liabilities

At each balance sheet date basis the management
judgment, changes in facts and legal aspects, the
Company assesses the requirement of provisions

against the outstanding contingent liabilities. However,
the actual future outcome may be different from
this judgement.

(3) Impairment of financial assets

The evaluation of applicability of indicators of impairment of
assets requires assessment of several external and internal
factors which could result in deterioration of recoverable
amount of the assets. At each balance sheet date, based
on historical default rates observed over expected life,
existing market conditions as well as forward looking
estimates, the management assesses the expected credit
losses on outstanding receivables. Further, management
also considers the factors that may influence the credit risk
of its customer base, including the default risk associated
with industry and country in which the customer operates.

(4) Defined benefit obligation (DBO)

Management''s estimate of the DBO is based on a
number of underlying assumptions such as standard
rates of inflation, mortality, discount rate and
anticipation of future salary increases. Variation in
these assumptions may significantly impact the DBO
amount and the annual defined benefit expenses.

(5) Useful lives of depreciable/amortisable assets

Management reviews its estimate of the useful lives of
depreciable/amortisable assets at each reporting date,
based on the expected utility of the assets. Uncertainties
in these estimates relate to technical and economic
obsolescence that may change the utilisation of assets.

(6) Leases

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.

(7) Government grant

Grants receivables are based on estimates for utilisation
of the grant as per the regulations as well as analysing
actual outcomes on a regular basis and compliance
with stipulated conditions. Changes in estimates or
non-compliance of stipulated conditions could lead to
significant changes in grant income and are accounted
for prospectively over the balance life of the asset.

(8) Fair value measurements

Management applies valuation techniques to
determine fair value of equity shares (where active
market quotes are not available) and stock options.
This involves developing estimates and assumptions
around volatility, dividend yield which may affect the
value of equity shares or stock options.

Estimates and judgements are continuously evaluated.
They are based on historical experience and other
factors including expectation of future events that may
have a financial impact on the Company and that are
believed to be reasonable under the circumstances.

c. The title deeds of all the immovable properties held by the Company (other than properties where the Company is the
lessee and the lease agreements are duly executed in favour of the lessee), except for the following properties, for which the
Company''s management is in the process of getting the registration in the name of the Company:

1. Freehold Land amounting H 989.54 lakhs is in held in the name of Haryana Ispat Private Limited

Further, For title deeds of the following immovable properties in the nature of land, which have been mortgaged as security
for loans or borrowings taken by the Company, are lying with respective lenders.

a. The net carrying value of trade receivables is considered a reasonable approximation of fair value.

b. Refer note 24(a) for information on trade receivables pledged as security by the Company.

c. There are no unbilled receivables, hence the same is not disclosed in the ageing schedule.

d. No trade or other receivable are due from directors or other officers of the Company either severally or jointly with any other
person. Nor any trade or other receivable are due from firms or private companies respectively in which any director is a
partner, a director or a member

e. The carrying amounts of the trade receivables include receivables which are subject to a bill discounting arrangement with the
bank. Under this arrangement, the Company has transferred the relevant receivables to the bank in exchange for cash. However,
the Company retains the credit risk with respect to the transferred receivables due to the existence of recourse till the due date
of the relevant bills discounted. Accordingly, the Company continues to recognise the transferred receivables in their entirety
in its standalone balance sheet till the due date. The amount repayable under the bills discounting arrangement is presented
as unsecured current borrowings in note 24 - Current financial liabilities - borrowings. The Company considers that the held to
collect business model remains appropriate for these receivables and hence continues measuring them at amortised cost.

The relevant carrying amounts in respect of the bills discounting arrangement is as follows:

b. Terms/rights attached to equity shares

The Company has only one class of equity shares having a par value of H 2 per share (31 March 2024: H 2 per share). Each
holder of equity shares is entitled to one vote per share. The Company declares and pays dividend in Indian rupees.

During the year ended 31 March 2025, the amount of per share final dividend recognised as distributions to equity shareholders
is H 2 per share (31 March 2024: H 2 per share) amounting to H 720.48 lakh (previous year - H 720.48 lakh).

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the
Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares
held by the shareholders.

i) Capital reserve

Capital reserves represents proceeds of forfeited shares.

ii) Security premium

Securities premium is used to record the premium on issue of shares. The reserve is utilised in accordance with the
provisions of the Act.

iii) Share options outstanding account

The Company has implemented a share option scheme under which option to subscribe for the Company''s share have been
granted to employees of the Company and its subsidiary companies. The reserve is used to recognise the value of equity
settled share options provided to such employees. See note 51 for further details.

iv) General reserve

Under the erstwhile Companies Act 1956, general reserve was created through an annual transfer of net income at a
specified percentage in accordance with Companies (Transfer of profits to Reserve) Rules,1975. Consequent to introduction
of the Companies Act 2013, there is no such requirement to mandatorily transfer a specified percentage of the net profit to
general reserve.

v) Retained earnings

Retained earnings are created from the profit / loss of the Company, as adjusted for distributions to owners, transfers to
other reserves, etc.

vi) Equity instruments through other comprehensive income

The Company has elected to recognise changes in the fair value of certain investment in equity instruments in other
comprehensive income. These changes are accumulated in this reserve within equity.

a) The term loans (including current maturities) are secured by equitable mortgage of certain land and building at Plot No. 4, 5A,
52, 53, 54 and 54A DLF Industrial Estate, Phase-I, Delhi - Mathura Road and factory land and building situated at 49 km stone
Delhi Mathura Road, Village Prithla, Tehsil-Palwal, Distt. Palwal, Haryana and Plot No 109-110, Vemgal Industrial Area, District
Kolar, Bangalore, Karnataka and hypothecation of plant and machinery and other property, plant and equipment.

b) The terms and repayment profile of the term loans from banks is below:

(i) Term loan from Punjab National Bank carries an interest of 8.35% to 9.30% and is repayable in 60 monthly instalments
commencing from August 2019 with last instalment due in May 2024.

(ii) Term loan from State Bank of India carries an interest of 8.70% to 9.00% and is repayable in 60 monthly instalments
commencing from January 2020 with last instalment due in February 2029.

(iii) Term loans from HDFC Bank carry an interest in the range of 7.96% to 9.25% and are repayable in 51 - 60 monthly
instalments commencing from October 2021 with last instalment due in November 2029.

c) There has been no default in servicing of loan during the year.

(i) This pertains to security deposits received from customers. Refer note 48.

(ii) During the current year, the Company has completed its assessment in relation to fulfillment of export obligation against one
of the license and paid the requisite duty amount against the un-fulfilled export obligation to the custom authorities. Owing
to final settlement on account of payment of requisite duty, the remaining balance which pertained to the un-fulfilled export
obligation of H 152.21 had been transferred to Deferred grant income. The said balance will be amortized in the remaining life
of property, plant and equipment against which such export obligation was made.

Further during the previous year ended 31 March 2024, expected liability amounting to H 601.71 lakh, reclassified to other
payable upon filling of necessary application by the Company for the foreclosure of one license under EPCG scheme.
Also refer note 27.

Note:

a) The cash credit facilities and working capital demand loan are secured by hypothecation of all inventories including those
in transit, receivables, book debts on pari passu basis, equitable mortgage of land and building situated at Plot No 4, 5A, 52,
53,54 and 54A DLF Industrial Estate, Phase-I, Delhi- Mathura Road and factory land and building situated at 49 km stone Delhi
Mathura Road, Village Prithla, Tehsil-Palwal, Distt. Palwal, Haryana and Plot No 109-110, Vemgal Industrial Area, District Kolar,
Bangalore, Karnataka.

b) The outstanding balance of cash credit facilities is repayable on demand and the rate of interest ranges between 8.30% to
9.20% (31 March 2024: 7.95% to 9.00%) per annum.

c) The outstanding balance of working capital demand loan is repayable within a period of 90 days and the rate of interest
ranges between 6.90% to 7.20% (31 March 2024: 6.96% to 7.55%) per annum.

d) The cash credit facilities and working capital demand loans have been used for the specific purpose for which they are taken
as at the year end.

e) The bills discounting facility from banks are secured by first charge on trade receivables subject to the bills
discounting arrangement.

f) Details of quarterly statements of current assets filed by the Company with banks and reasons of material discrepancies :

i) Defined contribution plans

The Company makes fixed contribution towards provident fund and Employees'' State Insurance (ESI) for qualifying employees.
The provident fund plan is operated by the Regional Provident Fund Commissioner and the Company is required to contribute
a specified percentage of payroll cost to fund the benefits. Similarly, the contribution is made in ESI at a specified percentage
of payroll cost.

The Company recognised H 256.25 lakh (31 March 2024: H 234.82 lakh) for provident fund contributions and H 7.01 lakh
(31 March 2024: H 12.54 lakh) for ESI & LWF contributions in the Standalone Statement of Profit and Loss and included in
"Employee benefits expenses" in note 33. The contribution payable to these plans by the Company is at rates specified in the
rules of the schemes.

ii) Defined benefit plans
Gratuity

Contribution to Gratuity funds- Life Insurance Corporation of India, Group Gratuity Scheme

The Company provides for gratuity for employees in India as per the Payment of Gratuity Act, 1972. Employees who are in
continuous service for a period of 5 years are eligible for gratuity. The amount of gratuity payable on retirement/termination
is the employees last drawn basic salary per month computed proportionately for 15 days salary multiplied for the number
of years of service. The gratuity plan is a funded plan and the Company makes contribution to recognised funds in India.

The unfunded gratuity obligation of directors is determined based on actuarial valuation using the Projected Unit Credit Method.

Sensitivities due to mortality and withdrawals are not material. Hence, impact of change is not calculated above.

The sensitivity analysis above have been determined based on a method that extrapolates the impact on defined benefit
obligation as a result of reasonable changes in key assumptions occurring at the end of the reporting year. This analysis
may not be representative of the actual change in the defined benefit obligations as it is unlikely that the change in
assumptions would occur in isolation of one another as some of the assumptions may be correlated.

The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to
the previous year.

D) Risk exposure

i) Changes in discount rate

A decrease in discount yield will increase plan liabilities."

ii) Mortality table

The gratuity plan obligations are to provide benefits for the life of the member, so increases in life expectancy will
result in an increase in plan liabilities.

iii) Other long-term employee benefit plans

The Company provides for compensated absences to its employees. The employees can carry-forward a portion of the
unutilized accrued compensated absences and utilise it in future service periods or receive cash compensation on termination
of employment. Since the compensated absences do not fall due wholly within twelve months after the end of the period in
which the employees render the related service and are also not expected to be utilised wholly within twelve months after the
end of such period, the benefit is classified as a other long-term employee benefit. The Company records an obligation for such
compensated absences in the period in which the employee renders the services that increase this entitlement. The scheme is
unfunded and liability for the same is recognised on the basis of actuarial valuation. A provision of H 70.38 lakh (31 March 2024:
H 75.98 lakh) for the year have been made on the basis of actuarial valuation as at the year end and debited to the Standalone
Statement of Profit and Loss. As at 31 March 2025, provision for compensated absences amounts to H 196.10 lakh (31 March
2024 - H 177.58 lakh) presented as provisions for employee benefit obligations in note 21 - Provisions.

40 Operating segments

In accordance with Ind AS 108 ''Operating Segments'', the Board of Directors of the Company, being the chief operating decision
maker of the Company has determined "Automotive components" as the only operating segment. Further, in terms of paragraph
31 of Ind AS 108, entity wide disclosures have been presented below:

Entity wide disclosures

A. Information about products and services

The Company is engaged in the manufacturing and marketing of one product line i.e. "Automotive Components" primarily
used in the automobile industry. Therefore, product wise revenue disclosure is not applicable.

B. Information about geographical area

The major sales of the Company are made to customers which are domiciled in India. Information concerning principal
geographic areas is as follows

A. Capital commitment:

(i) Estimated amount of contracts remaining to be executed on the capital account and not provided for in the books of
account (net of capital advances) H 701.18 lakhs (H 276.10 lakhs as at 31 March 2024).

B. Contingent liabilities and other commitments

a) Service tax demand amounting to H 106.04 lakh for the period April 2014 to June 2017 was due to disallowance of
the Cenvat credit on outward transportation of final product to the buyer''s premises. Representation against the
aforementioned demand were filed before the Joint Commissioner of Central Tax, Faridabad, Haryana. On 4 June
2021, the Company had received an unfavourable order from the Joint Commissioner. On 2 August 2021, the Company
had filed an appeal against the aforesaid order with the Commissioner Appeals, however, the Company had received
an unfavorable order from the Commissioner Appeals vide order dated 25 February 2022. The Company had filed
an appeal, on 26 May 2022, against the said demand/order with Customs Excise and Service Tax Appellate Tribunal
(''CESTAT''), Chandigarh and remains confident of getting a relief against the said order.

b) Interest amounting to H 82.65 lakh (31 March 2024 - H 73.71 lakh) on the demands raised by excise authorities has been
calculated by the Company based on the demand cum show-cause notices pending adjudication.

c) Demand under GST amounting to H 50.00 lakh was raised vide show cause notice reference no. ZD060922013840M
dated 21 September 2022, pertaining to mismatch of input tax credit in GSTR-3B and GSTR-2A/2B for the financial year
2019-20. The Company has submitted reply to the said show cause notice vide letter dated 27 October 2022. In current
year, the favourable order has been received from Excise and Taxation officer stating that the proceedings have been
dropped in relation to the reply submitted by the company.

d) Appeals filed before Commissioner of Income tax (CIT) for demands under Income Tax Act 1961 in AY 2013-14, 2016¬
17, 2018-19 and 2020-21. The appeals have not yet been disposed off by CIT and the company expects a favorable
chance of getting the relief against these orders.

The Company has no other material contingent liabilities other than those disclosed above, which could devolve
upon the Company.

It is not practicable for the Company to estimate the timings of the cash flows, if any, in respect of the above pending
resolution of the respective proceedings. The Company has assessed that it is only possible, but not probable, that
outflow of economic resources will be required in respect of the above proceedings.

Lease payments not recognised as a liability

The Company has elected not to recognise a lease liability for short-term leases (leases with an expected term of 12 months or less)
or for leases of low value assets. Payments made under such leases are expensed on a straight-line basis. The Company does not
have any liability to make variable lease payments for the right-to-use the underlying asset recognised in the financial statements.

The expense relating to payments not included in the measurement of the lease liability for short term leases is H 100.69 lakhs
(31 March 2024 - H 56.73 lakhs). At 31 March 2025 and 31 March 2024, the Company is not committed to any liability towards
short-term leases.

Total cash outflow for leases for the year ended 31 March 2025 was H138.12 lakhs (31 March 2024 - H 94.62 lakhs) [including
H 100.69 lakhs (31 March 2024 - H 56.73 lakhs) paid towards the aforementioned short-term leases].

43 Related party disclosures

In accordance with the requirement of Indian Accounting Standard (Ind AS) 24 "Related Party Disclosures”, name of the related
party, related party relationship, transactions and outstanding balances including commitments where control exists and with
whom transactions have taken place during the reported period are as follows:

Note :

1) The sale to and purchase from and other transactions with related party are made on terms equivalent to those that
prevail in arm ''s length transaction.

2) Outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash.

3) The remuneration to the Key managerial personnel does not include the provisions made for Gratuity as they are
determined to the company as a whole

4) The Company Secretary (CS) of the Company resigned with effect from 13 March 2025. In accordance with Section
203(4) of the Companies Act, 2013, the resultant vacancy is required to be filled by the Company within six months.
The Company is in the process of identifying a suitable candidate to fill the vacancy in compliance with applicable
regulatory timelines.

I Financial instruments

(a) Financial instruments by category

Derivative financial instruments and investment in mutual funds are measured at fair value through profit or loss.
Investment in equity instruments (except investments in subsidiaries) are measured at fair value through other
comprehensive income. Other than the aforementioned, all other financial assets and liabilities viz. security deposits,
cash and cash equivalents, other bank balances, interest receivable, other receivables, trade payables, employee related
liabilities and borrowings, are measured at amortised cost.

(b) Fair value hierarchy

This section explains the judgments and estimates made in determining the fair values of the financial instruments
that are (a) recognised and measured at fair value and (b) measured at amortised cost and for which fair values are
disclosed in the standalone financial statements. To provide an indication about the reliability of the inputs used in
determining fair value, the Company has classified its financial instruments into the three levels prescribed under the
accounting standard. An explanation of each level follows underneath the table.

The following table shows the carrying amounts and fair values of financial assets and financials liabilities, including
their levels of in the fair value hierarchy:

*The equity securities which are not held for trading, and for which the Company has made an irrevocable election at initial recognition to recognise
changes in fair value through OCI rather than profit or loss as this is strategic investment and the Company considered this to be more relevant.

The Company has an established control framework with respect to the measurement of fair values. The finance and
accounts team that has overall responsibility for overseeing all significant fair value measurements and reports directly
to the board of directors. The team regularly reviews significant unobservable inputs and valuation adjustments. If third
party information, such as broker quotes or pricing services, is used to measure fair values, then the team assesses the
evidence obtained from the third parties to support the conclusion that these valuations meet the requirements of Ind
AS, including the level in the fair value hierarchy in which the valuations should be classified. Significant valuation issues
are reported to the Company''s board of directors.

Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation
techniques as follows.

Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly
(i.e. as prices) or indirectly (i.e. derived from prices)

Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).

There have been no transfers within the levels for the year ended 31 March 2025 and 31 March 2024.

Fair value of financial assets and liabilities measured at amortised cost

The carrying amounts of short-term trade and other receivables, trade payables, cash and cash equivalents and other
bank balances are considered to be the same as their fair values, due to their short-term nature.

For other financial liabilities/ assets that are measured at amortised cost, the carrying amounts are considered equal to
their respective fair values.

II. Financial risk management

The Company''s principal financial liabilities comprise borrowings, lease liabilities, trade payables and other payables. The
Company''s principal financial assets include trade and other receivables, investments and cash and bank balances that it
derives directly from its operati

---

Mar 31, 2024

(5) Provisions and contingent liabilities and contingent assets

A provision is recognised if, as a result of a past event, the Company has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows at a pretax rate that reflects current market assessments of the time value of money and the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at reporting date, taking into account the risks and uncertainties surrounding the obligation.

When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, the receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably. The expense relating to a provision is presented in the standalone statement of profit and loss net of any reimbursement.

Contingent liabilities are possible obligations that arise from past events and whose existence will only be confirmed by the occurrence or non-occurrence of one or more future events not wholly within the control of the Company. Where it is not probable that an outflow of economic benefits will be required, or the amount cannot be estimated reliably, the obligation is disclosed as a contingent liability, unless the probability of outflow of economic benefits is remote. Contingent liabilities are disclosed on the basis of judgment of the management/independent experts. These are reviewed at each balance sheet date and are adjusted to reflect the current management estimate.

Contingent assets are neither recognised nor disclosed in the standalone financial statements.

(6) Government grants

Grants from government are recognised at their fair value when there is reasonable assurance that the grant will be received and the Company will comply with all the attached conditions.

When the grant relates to a revenue item, it is recognised in standalone statement of profit and loss on a systematic basis over the periods in which the related costs are expensed. The grant can either be presented separately or can deduct from related reported expense.

Government grant relating to capital assets are recognised initially as deferred income and are credited to standalone statement of profit and loss on a straight line basis over the expected lives of the related asset and presented as other operating income within revenue from operations.

(7) Foreign currency transactions and translation

Transactions in foreign currencies are initially recorded at the functional currency spot rates at the date the transaction first qualifies for recognition.

Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency spot rates of exchange at the reporting date. Exchange differences arising on settlement or

translation of monetary items are recognised in the standalone statement of profit and loss in the year in which it arises.

Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction.

The Company uses derivative financial instruments, such as forward currency contracts to hedge its foreign currency risks in respect of its imports and exports. Such derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered into and are subsequently re-measured at fair value. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative. Any gains or losses arising from changes in the fair value of derivatives are taken to the standalone statement of profit and loss.

(8) Revenue

The Company recognises revenue from the following major sources:

Sale of products (including scrap sales)

Revenue from sale of products (including scrap sales) is measured based on the consideration specified in a contract with a customer and excludes amounts collected on behalf of third parties. It is measured at the amount of transaction price, net of returns and allowances, trade discounts and volume rebates. The Company recognises revenue when it transfers control over a product to a customer i.e. when goods are delivered at the delivery point, as per terms of the agreement, which could be either customer premises or carrier premises who will deliver goods to the customer. When payments received from customers exceed revenue recognised to date on a particular contract, any excess (a contract liability) is reported in the standalone Balance Sheet under other current liabilities (see note 27).

Satisfaction of performance obligations

The Company''s revenue is derived from the single performance obligation to transfer primarily products under arrangements in which the transfer of control of the products and the fulfilment of the Company''s performance obligation occur at the same time. Revenue from the sale of goods is recognised when the Company has transferred control of the goods to the buyer and the buyer obtains the benefits from the goods, the potential cash flows and the amount of revenue (the transaction price) can be measured

reliably, and it is probable that the Company will collect the consideration to which it is entitled to in exchange for the goods.

Whether the customer has obtained control over the asset depends on when the goods are made available to the carrier or the buyer takes possession of the goods, depending on the delivery terms.

Payment terms

The sale of goods is typically made under credit payment terms differing from customer to customer and ranges between 0-60 days.

Variable considerations associated with such sales

Periodically, the Company enters into volume or other rebate programs where once a certain volume or other conditions are met, it gives the customer as volume discount some portion of the amounts previously billed or paid. For such arrangements, the Company only recognises revenue for the amounts it ultimately expects to realise from the customer. The Company estimates the variable consideration for these programs using the most likely amount method or the expected value method, whichever approach best predicts the amount of the consideration based on the terms of the contract and available information and updates its estimates each reporting period.

Contract assets and contract liabilities

The Company recognises contract liabilities for consideration received in respect of unsatisfied performance obligations and reports these amounts as other liabilities in the standalone balance sheet. Similarly, if the Company satisfies a performance obligation before it receives the consideration, the Company recognises either a contract asset or a receivable in its standalone balance sheet, depending on whether something other than the passage of time is required before the consideration is due.

A contract asset is the right to consideration in exchange for goods or services transferred to the customer. If the Company performs by transferring goods or services to a customer before the customer pays consideration or before payment is due, a contract asset is recognised for the earned consideration when that right is conditional on Company''s future performance. A contract liability is the obligation to transfer goods or services to a customer for which the Company has received consideration (or an amount of consideration is due) from the customer. If a customer pays consideration before the Company transfers goods or services to the customer, a contract liability is recognised when the payment is made or the payment

is due (whichever is earlier). Contract liabilities are recognised as revenue when the Company performs under the contract. The Company does not expect to have any contracts where the period between the transfer of the promised goods or services to the customer and payment by the customer exceeds one year. As a consequence, the Company does not adjust any of the transaction prices for the time value of money.

Trade receivables

Trade receivables are amounts due from customers for goods sold in the ordinary course of business and reflects Company''s unconditional right to consideration (that is, payment is due only on the passage of time). Trade receivables are recognised initially at the transaction price as they do not contain significant financing components. The Company holds the trade receivables with the objective of collecting the contractual cash flows and therefore measures them subsequently at amortised cost using the effective interest method, less loss allowance.

Transfer of trade receivables

The Company transfers certain trade receivables under bill discounting arrangements with banks. These transferred receivables do not qualify for derecognition as the Company retains the credit risk with respect to these transferred receivables due to the existence of the recourse arrangement. Consequently, the proceeds received from such transfers with recourse arrangements are recorded as borrowings from banks and classified under current borrowings.

(9) Other income

Interest income from financial assets is recognised, when no significant uncertainty as to measurability or collectability exists, on a time proportion basis taking into account the amount outstanding and the applicable interest rate, using the effective interest rate method (EIR).

(10) Employee benefits

10.1 Short term employee benefits

Short- term employee benefit obligations are measured on an undiscounted basis and are expensed as the relative service is provided. A liability is recognised for the amount expected to be paid e.g., under short-term cash bonus, if the Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee, and the amount of obligation can be estimated reliably.

10.2 Defined contribution plan

A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into separate entities and will have no legal or constructive obligation to pay further amounts. Obligations for contributions to defined contribution plans are recognised as an employee benefits expense in the standalone statement of profit and loss in the period during which services are rendered by employees.

The Company pays fixed contribution to government administered provident fund scheme at predetermined rates. The contributions to the fund for the year are recognised as expense and are charged to the standalone statement of profit and loss.

10.3 Defined benefit plan

A defined benefit plan is a post-employment benefit plan other than a defined contribution plan. The Company''s liability towards gratuity is in the nature of defined benefit plan.

The Company''s net obligation in respect of defined benefit plan is calculated separately by estimating the amount of future benefit that employees have earned in return for their service in the current and prior periods; that benefit is discounted to determine its present value. Any unrecognised past service costs are deducted. The discount rate is based on the prevailing market yields of Indian government securities as at the reporting date that have maturity dates approximating the terms of the Company''s obligations and that are denominated in the same currency in which the benefits are expected to be paid.

The calculation is performed annually by a qualified actuary using the projected unit credit method. When the calculation results in a benefit to the Company, the recognised asset is limited to the total of any unrecognised past service costs. Any actuarial gains or losses are recognised in other comprehensive income in the period in which they arise.

10.4 Other long-term employee benefits

Benefits under the Company''s leave encashment constitute other long-term employee benefit.

The employees can carry forward a portion of the unutilised accrued compensated absences and

utilise it in future service periods or receive cash compensation on termination of employment. The benefit is discounted to determine its present value. The discount rate is based on the prevailing market yields of Indian government securities as at the reporting date that have maturity dates approximating the terms of the Company''s obligations. The obligation is measured on the basis of independent actuarial valuation using the projected unit credit method.

(11) Share based payments

The Company recognises compensation expense relating to share based payments in accordance with Ind AS 102, ''Share-based payment''. Stock options granted by the Company to its employees and employees of the subsidiaries are accounted as equity settled options. In respect of the options granted to the employees of the Company, the estimated fair value of options granted that is determined on the date of grant, is charged to standalone statement of profit and loss on a straight-line basis over the vesting period of options, with a corresponding increase in equity. The total amount to be expensed is determined by reference to the fair value of the options granted:

(i) including any market performance conditions

(ii) excluding the impact of any service and nonmarket performance vesting conditions

(iii) including the impact of any non-vesting conditions

In respect of the options granted to the employees of the subsidiary companies, the estimated fair value of options granted that is determined on the date of grant, is debited to the value of investment in the subsidiary company, on a straight-line basis over the vesting period of options, with a corresponding increase in equity.

At the end of each period, the entity revises its estimates of the number of options that are expected to vest based on the non-market vesting and service conditions. It recognises the impact of the revision to original estimates, if any, in profit or loss, with corresponding adjustment to equity.

Where options are forfeited due to a failure by the employee to satisfy the service conditions, any expenses previously recognised in relation to such options are reversed effective from the date of the forfeiture.

(12) Lease

Company as a lessee

The Company''s lease asset classes primarily consist of property leases. The Company assesses whether a contract contains a lease, at inception of a contract. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Company assesses whether:

(i) the contract involves the use of an identified asset;

(ii) the Company has substantially all of the economic benefits from use of the asset through the period of the lease; and

(iii) the Company has the right to direct the use of the asset.

At the date of commencement of the lease, the Company recognises a right-of-use asset ("ROU”) and a corresponding lease liability for all lease arrangements in which it is a lessee, except for leases with a term of twelve months or less (short-term leases) and low value leases. For these short-term and low value leases, the Company recognises the lease payments as an operating expense on a straight-line basis over the term of the lease.

Certain lease arrangements include the options to extend or terminate the lease before the end of the lease term. ROU assets and lease liabilities includes these options when it is reasonably certain that they will be exercised.

The right-of-use assets are initially recognised at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or prior to the commencement date of the lease plus any initial direct costs less any lease incentives. They are subsequently measured at cost less accumulated depreciation and impairment losses.

Right-of-use assets are depreciated from the commencement date on a straight-line basis over the shorter of the lease term and useful life of the underlying asset.

The lease liability is initially measured at amortised cost at the present value of the future lease payments. The lease payments are discounted using the interest rate implicit in the lease or, if not readily determinable, using the incremental borrowing rates in the country of domicile of these leases. Lease liabilities are remeasured with a corresponding adjustment to the

related right-of-use asset if the Company changes its assessment if whether it will exercise an extension or a termination option.

(13) Taxes on income

Income-tax expense comprises current and deferred tax. Current tax expense is recognised in the standalone statement of profit and loss except to the extent that it relates to items recognised directly in other comprehensive income or equity, in which case it is recognised in other comprehensive income or equity.

Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted and as applicable at the reporting date, and any adjustment to tax payable in respect of previous years.

Deferred tax is recognised using the balance sheet method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority.

Deferred tax is recognised in the standalone statement of profit and loss except to the extent that it relates to items recognised directly in other comprehensive income or equity, in which case it is recognised in other comprehensive income or equity.

A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which the temporary difference can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.

(14) Segment reporting

In accordance with Ind AS 108, the operating segments used to present segment information are identified on the basis of internal reports used by the Company''s management to allocate resources to the segments and assess their performance. The Board of Directors is collectively the Company''s ''Chief Operating Decision Maker'' or ''CODM'' within the meaning of Ind AS 108.

(15) Equity investment

Equity investments in joint venture and subsidiaries are measured at cost. The investments are reviewed

at each reporting date to determine whether there is any indication of impairment considering the provisions of Ind AS 36 ''Impairment of Assets''. If any such indication exists, policy for impairment of nonfinancial assets is followed.

(16) Financial instruments

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

16.1 Financial assets

Initial recognition and measurement

All financial assets are recognised initially at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets (other than financial assets at fair value through profit or loss) are added to or deducted from the fair value of the financial assets, as appropriate, on initial recognition. However, trade receivables that do not contain a significant financing component are measured at transaction price in accordance with Ind AS 115. Transaction costs of financial assets carried at fair value through profit or loss are expensed in the standalone statement of profit and loss.

Subsequent measurement

(i) Financial assets carried at amortised cost

A financial asset is subsequently measured at amortised cost if it is held within a business model whose objective is to hold the asset in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

(ii) Financial assets at fair value through other comprehensive income (FVOCI)

A financial asset is subsequently measured at fair value through other comprehensive income if it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

(iii) Financial assets at fair value through profit or loss (FVTPL)

A financial asset which is not classified in any of the above categories are subsequently fair valued through profit or loss.

Derecognition

A financial asset (or, where applicable, a part of a financial asset or part of a Company of similar financial assets) is primarily derecognised (i.e. removed from the Company''s balance sheet) when:

• The right to receive cash flows from the asset have expired, or

• The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ''passthrough'' arrangement; and either (a) the Company has transferred substantially all the risks and rewards of the asset, or (b) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

Impairment of financial assets

In accordance with Ind AS 109, the Company applies expected credit loss (ECL) model for measurement and recognition of impairment loss on the following financial assets and credit risk exposure:

(a) Financial assets that are debt instruments, and are measured at amortised cost e.g., loans, debt securities, deposits, trade receivables and bank balance.

(b) Trade receivables using the lifetime expected credit loss model.

For recognition of impairment loss on other financial assets and risk exposure, the Company determines that whether there has been a significant increase in the credit risk since initial recognition. If credit risk has not increased significantly, 12-month ECL is used to provide for impairment loss. However, if credit risk has increased significantly, lifetime ECL is used. If, in a subsequent period, credit quality of the instrument improves such that there is no

longer a significant increase in credit risk since initial recognition, then the entity reverts to recognising impairment loss allowance based on 12-month ECL.

16.2 Financial liabilities

Initial recognition and measurement

Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate. All financial liabilities are recognised initially at fair value and, in the case of borrowings and payables, net of directly attributable transaction costs. The Company''s financial liabilities include trade and other payables, borrowings and derivative financial instruments.

Subsequent measurement

The measurement of financial liabilities depends on their classification, as described below:

Financial liabilities at amortised cost

After initial measurement, such financial liabilities are subsequently measured at amortised cost using the EIR method. Gains and losses are recognised in the standalone statement of profit and loss when the liabilities are derecognised as well as through the EIR amortisation process. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in finance costs in the standalone statement of profit and loss. This category generally applies to borrowings, trade payables and other contractual liabilities.

Derecognition

A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the standalone statement of profit and loss.

16.3 Offsetting

Financial assets and liabilities are offset and the net amount is reported in the standalone balance sheet where there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously. The legally enforceable right must not be contingent on future events and must be enforceable in the normal course of business and in the event of default, insolvency or bankruptcy of the Company or the counterparty.

D. Significant accounting judgments, estimates and assumptions

The preparation of standalone financial statements requires management to make judgments, estimates and assumptions that may impact the application of accounting policies and the reported value of assets, liabilities, income, expenses and related disclosures concerning the items involved as well as contingent assets and liabilities at the balance sheet date. The estimates and management''s judgments are based on previous experience and other factors considered reasonable and prudent in the circumstances. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected.

In order to enhance understanding of the standalone financial statements, information about significant areas of estimation, uncertainty and critical judgments in applying accounting policies that have the most significant effect on the amounts recognised in the standalone financial statements is as under:

(1) Recognition of deferred tax assets

The extent to which deferred tax assets can be recognised is based on an assessment of the probability of the Company''s future taxable income (supported by reliable evidence) against which the deferred tax assets can be utilized.

(2) Contingent liabilities

At each balance sheet date basis the management judgment, changes in facts and legal aspects, the Company assesses the requirement of provisions against the outstanding contingent liabilities. However, the actual future outcome may be different from this judgement.

(3) Impairment of financial assets

The evaluation of applicability of indicators of impairment of assets requires assessment of several external and internal factors which could result in deterioration of recoverable amount of the assets. At each balance sheet date, based on historical default rates observed over expected life, existing market conditions as well as forward looking estimates, the management assesses the expected credit losses on outstanding receivables. Further, management also considers the factors that may influence the credit risk of its customer base, including the default risk associated with industry and country in which the customer operates.

(4) Defined benefit obligation (DBO)

Management''s estimate of the DBO is based on a number of underlying assumptions such as standard rates of inflation, mortality, discount rate and anticipation of future salary increases. Variation in these assumptions may significantly impact the DBO amount and the annual defined benefit expenses.

(5) Useful lives of depreciable/amortisable assets

Management reviews its estimate of the useful lives of depreciable/amortisable assets at each reporting date, based on the expected utility of the assets. Uncertainties in these estimates relate to technical and economic obsolescence that may change the utilisation of assets.

(6) Leases

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.

(7) Government grant

Grants receivables are based on estimates for utilization of the grant as per the regulations as well as analysing actual outcomes on a regular basis and compliance with stipulated conditions. Changes in estimates or non-compliance of stipulated conditions could lead to significant changes in grant income and are accounted for prospectively over the balance life of the asset.

(8) Fair value measurements

Management applies valuation techniques to determine fair value of equity shares (where active market quotes are not available) and stock option. This involves developing estimates and assumptions around volatility, dividend yield which may affect the value of equity shares or stock options.

Estimates and judgements are continuously evaluated. They are based on historical experience and other factors including expectation of future events that may have a financial impact on the Company and that are believed to be reasonable under the circumstances.

39 Employee benefits

i) Defined contribution plans

The Company makes fixed contribution towards provident fund and Employees'' State Insurance (ESI) for qualifying employees. The provident fund plan is operated by the Regional Provident Fund Commissioner and the Company is required to contribute a specified percentage of payroll cost to fund the benefits. Similarly, the contribution is made in ESI at a specified percentage of payroll cost.

The Company recognised H 234.82 lakh (31 March 2023: H 223.11 lakh) for provident fund contributions and H 12.54 lakh (31 March 2023: H 10.65 lakh) for ESI contributions in the Standalone Statement of Profit and Loss and included in "Employee benefits expenses" in note 33. The contribution payable to these plans by the Company is at rates specified in the rules of the schemes.

ii) Defined benefit plans Gratuity

Contribution to Gratuity funds- Life Insurance Corporation of India, Group Gratuity Scheme

The Company provides for gratuity for employees in India as per the Payment of Gratuity Act, 1972. Employees who are in continuous service for a period of 5 years are eligible for gratuity. The amount of gratuity payable on retirement/termination is the employees last drawn basic salary per month computed proportionately for 15 days salary multiplied for the number of years of service. The gratuity plan is a funded plan and the Company makes contribution to recognised funds in India.

The unfunded gratuity obligation of directors is determined based on actuarial valuation using the Projected Unit Credit Method.

39 Employee benefits (Contd.)

(31 March 2023: H 51.96 lakh) for the year have been made on the basis of actuarial valuation as at the year end and debited to the Standalone Statement of Profit and Loss. As at 31 March 2024, provision for compensated absences amounts to H 177.58 lakh (31 March 2023 - H 180.49 lakh) presented as provisions for employee benefit obligations in note 21 - Provisions

40 Operating segments

In accordance with Ind AS 108 ''Operating Segments'', the Board of Directors of the Company, being the chief operating decision maker of the Company has determined ""Automotive components"" as the only operating segment.

Further, in terms of paragraph 31 of Ind AS 108, entity wide disclosures have been presented below:

Entity wide disclosures

A. Information about products and services

The Company is engaged in the manufacturing and marketing of one product line i.e. "Automotive Components" primarily used in the automobile industry. Therefore, product wise revenue disclosure is not applicable.

B. Information about geographical area

The major sales of the Company are made to customers which are domiciled in India. Information concerning principal geographic areas is as follows

C. Information about major customers

Revenues of H 12,522.07 lakh and H 9,751.53 lakh (H 11,113.84 lakh and H 8,426.22 lakh) are derived from two customers, who

individually accounted for more than ten percent of the total revenue.

41 Contingent liabilities, contingent assets and commitments

A. Capital commitment:

(i) Estimated amount of contracts remaining to be executed on the capital account and not provided for in the books of account (net of capital advances) H 276.10 lakhs (H 190.68 lakhs as at 31 March 2023).

(ii) The Company vide memo no. 3278 dated 14 May 2013 had paid certain amounts to Senior Town Planner, Faridabad Circle, Faridabad, for the "change in land use” of part of the land situated at its Prithla unit. As per the agreed terms, there would be certain external development charges, scrutiny fees, etc. which are payable at a future date, if any variation is carried out at this said unit. However, the quantum of such future liability is not quantified in the said letter.

a) Service tax demand amounting to H 106.04 lakh for the period April 2014 to June 2017 was due to disallowance of the Cenvat credit on outward transportation of final product to the buyer''s premises. Representation against the aforementioned demand were filed before the Joint Commissioner of Central Tax, Faridabad, Haryana. On 4 June 2021, the Company had received an unfavourable order from the Joint Commissioner. On 2 August 2021, the Company had filed an appeal against the aforesaid order with the Commissioner Appeals, however, the Company had received an unfavorable order from the Commissioner Appeals vide order dated 25 February 2022. The Company had filed an appeal, on 26 May 2022, against the said demand/order with Customs Excise and Service Tax Appellate Tribunal (''CESTAT''), Chandigarh and remains confident of getting a relief against the said order.

b) Interest amounting to H73.71 lakh (31 March 2023 - H 70.25 lakh) on the demands raised by excise authorities has been calculated by the Company based on the demand cum show-cause notices pending adjudication.

c) Demand under GST amounting to H 50.00 lakh raised during the previous year ended 31 March 2023 vide show cause notice reference no. ZD060922013840M dated 21 September 2022, pertaining to mismatch of input tax credit in GSTR-3B and GSTR-2A/2B for the financial year 2019-20. The Company has submitted reply to the said show cause notice vide letter dated 27 October 2022. The Company is of the view that the issues raised by revenue do not have sufficient statutory backing and the Company''s stand is supported by various favorable judicial precedents. The Company believes that it has a strong case to argue and remains confident of getting a relief against the said demand.

The Company has no other material contingent liabilities other than those disclosed above, which could devolve upon the Company.

It is not practicable for the Company to estimate the timings of the cash flows, if any, in respect of the above pending resolution of the respective proceedings. The Company has assessed that it is only possible, but not probable, that outflow of economic resources will be required in respect of the above proceedings.

d) The Company, during the current year, has filed for the redemption/fulfilment of the export obligations in respect of one license under EPCG scheme with the relevant authorities. The management has performed a detailed assessment and concluded that the Company will be able to fulfil a part of the export obligation in respect of this license and proportionate duty on the un-fulfilled export obligation will be payable by the Company to the authorities. The Company has assessed that adequate liability for payment of the said duty in respect of the aforesaid license is existing in the books of accounts and estimated interest liability amounting to H 20.39 lakh (previous year H 329.23 lakh) on foreclosure of this license has been recognised in the standalone statement of profit and loss account (refer note 37).

42 Lease related disclosures as lessee (Contd.)

Lease payments not recognised as a liability

The Company has elected not to recognise a lease liability for short-term leases (leases with an expected term of 12 months or less) or for leases of low value assets. Payments made under such leases are expensed on a straight-line basis. The Company does not have any liability to make variable lease payments for the right-to-use the underlying asset recognised in the financial statements.

The expense relating to payments not included in the measurement of the lease liability for short term leases is H 56.73 lakhs (31 March 2023 - H 56.60 lakhs).

At 31 March 2024 and 31 March 2023, the Company is not committed to any liability towards short-term leases.

Total cash outflow for leases for the year ended 31 March 2024 was H 94.62 lakhs (31 March 2023 - H 103.80 lakhs) [including H 56.73 lakhs (31 March 2023 - H 56.60 lakhs) paid towards the aforementioned short-term leases].

43 Related party disclosures

In accordance with the requirement of Indian Accounting Standard (Ind AS) 24 "Related Party Disclosures”, name of the related party, related party relationship, transactions and outstanding balances including commitments where control exists and with whom transactions have taken place during the reported period are as follows:

45 Fair value measurements (Contd.)

(b) Fair value hierarchy

This section explains the judgments and estimates made in determining the fair values of the financial instruments that are (a) recognised and measured at fair value and (b) measured at amortised cost and for which fair values are disclosed in the standalone financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into the three levels prescribed under the accounting standard. An explanation of each level follows underneath the table.

The following table shows the carrying amounts and fair values of financial assets and financials liabilities, including their levels of in the fair value hierarchy:

*The equity securities which are not held for trading, and for which the Company has made an irrevocable election at initial recognition to recognise changes in fair value through OCI rather than profit or loss as this is strategic investment and the Company considered this to be more relevant.

The Company has an established control framework with respect to the measurement of fair values. The finance and accounts team that has overall responsibility for overseeing all significant fair value measurements and reports directly to the board of directors. The team regularly reviews significant unobservable inputs and valuation adjustments. If third party information, such as broker quotes or pricing services, is used to measure fair values, then the team assesses the evidence obtained from the third parties to support the conclusion that these valuations meet the requirements of Ind AS, including the level in the fair value hierarchy in which the valuations should be classified. Significant valuation issues are reported to the Company''s board of directors.

Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows.

Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices)

Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).

There have been no transfers within the levels for the year ended 31 March 2024 and 31 March 2023.

Fair value of financial assets and liabilities measured at amortised cost

The carrying amounts of short-term trade and other receivables, trade payables, cash and cash equivalents and other bank balances are considered to be the same as their fair values, due to their short-term nature.

For other financial liabilities/ assets that are measured at amortised cost, the carrying amounts are considered equal to their respective fair values.

II. Financial risk management

The Company''s principal financial liabilities comprise borrowings, lease liabilities, trade payables and other payables. The Company''s principal financial assets include trade and other receivables, investments and cash and bank balances that it derives directly from its operations.

The Company has exposure to the following risks arising from financial instruments:

- credit risk;

- liquidity risk; and

- market risk

This note presents information about the Company''s exposure to each of the above risks, the Company''s objectives, policies and processes for measuring and managing risk.

A. Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations resulting in a financial loss to the Company. Credit risk arises principally from trade receivables, loans and advances, cash and cash equivalents and deposits with banks.

Trade receivables

The Company primarily sells high tensile cold forged fasteners to bulk customers comprising mainly automotive manufacturers operating in India and outside India. The Company''s exposure to credit risk is influenced mainly by the individual characteristics of each customer. However, management also considers the factors that may influence the credit risk of its customer base, including the default risk of the industry and country in which customers operate.

45 Fair value measurements (Contd.)

Cash and cash equivalents, other bank balances and deposits with banks

Cash and cash equivalents and other bank balances of the Company are held with banks which have high external rating. The Company considers that its cash and cash equivalents and other bank balances have low credit risk based on the external credit ratings of the counterparties.

Loans to employees, security deposits and other financial assets

The Company provides loans to its employees and furnish security deposit to various parties for electricity, communication, etc.. The Company considers that its loans have low credit risk or negligible risk of default as the parties are well established entities and have strong capacity to meet the obligations. Other financial assets majorly includes receivables from scrap sales wherein the Company monitors the credit risk of the respective customer/ dealers on the basis of the individual characteristics of the customer/dealer and any default risk or increased credit risk in the past.

Investments

The Company has invested in unquoted equity instruments of its subsidiaries and other company. The management actively monitors the operation of subsidiaries which affect investments. The Company does not expect the counterparty to fail in meeting its obligations other than those specifically considered as impairment allowance as per the management''s assessment.

Plan assets

The Company has taken gratuity insurance policy from LIC of India for funding of its employee benefit obligations, LIC of India generally invest in securities of high credit rating.

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset.

The Company''s principal sources of liquidity are cash and cash equivalents and the cash flow that is generated from operations. The Company believes that the working capital is sufficient to meet its capital requirements. Accordingly, no liquidity risk is perceived.

As at 31 March 2024, the Company has a working capital of H 16,663.34 lakhs (31 March 2023 - H 13,184.30 lakhs) including cash and cash equivalents of H 757.15 lakhs (31 March 2023 - H 443.84 lakhs).

Market risk is the risk that changes in market prices, such as foreign exchange rates and interest rates will affect the Company''s income. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.

The Board of directors is responsible for setting up of policies and procedures to manage market risks of the Company. The Company is carrying out imports of certain raw materials and capital goods and exports finished goods which are denominated in the currency other than the functional currency of the Company which exposes it to foreign currency risk. In order to minimise the risk, the Company executes forwards contract with respect to purchases and sales made in currency other than its functional currency, the foreign exchange exposure of the Company is ascertained on the basis of the progress billings and purchase orders issued.

(iii) Price risk

The Company is mainly exposed to the price risk mainly due to its investment in mutual funds and equity instruments, which are measured at fair value through profit or loss. The price risk arises due to uncertainties about the future market values (quoted prices or NAV) of these instruments. To manage the price risk arising from investments in mutual funds and equity instruments, the group diversifies its portfolio. Further, the management reviews the investment portfolio and the movement in the market to manage the risk.

The Company''s investment in the mutual funds and equity instruments are publicly traded.

Sensitivity analysis

To provide a meaningful assessment of the price risk associated with the Company''s investment portfolio, the Company performed the sensitivity analysis to determine the impact of change in prices of the mutual funds and

46 Capital management

The Company''s objectives when managing capital are to:

- safeguard its ability to continue as a going concern, so that it can continue to provide returns for shareholders and benefits for other stakeholders; and

- maintain an appropriate capital structure of debt and equity.

The management assesses the capita requirements in order to maintain an efficient overall financing structure. The Company manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets. The Company is not subject to externally imposed capital requirements.

The Company monitors capital on the basis of its gearing ratio which is net debt divided by total equity. Net debt comprises of non-current and current borrowings less cash and cash equivalents. Equity includes equity share capital and other equity that are managed as capital. The gearing ratio at the end of the reporting periods are as follows:

48 Disclosures pursuant to Ind AS 115, Revenue from Contracts with Customers, are as follows: (Contd.)

(f) Satisfaction of performance obligations

The Company''s revenue is derived from the single performance obligation to transfer primarily hi-tensile fasteners under arrangements in which the transfer of control of the products and the fulfilment of the Company''s performance obligation occur at the same time. Revenue from the sale of goods is recognised when the Company has transferred control of the goods to the buyer and the buyer obtains the benefits from the goods, the potential cash flows and the amount of revenue (the transaction price) can be measured reliably, and it is probable that the Company will collect the consideration to which it is entitled to in exchange for the goods.

Whether the customer has obtained control over the asset depends on when the goods are made available to the carrier or the buyer takes possession of the goods, depending on the delivery terms. In case of the Company''s operations, generally the criteria to recognize revenue has been met when its products are delivered to its customers or to a carrier who will transport the goods to its customers, this is the point in time when the Company has completed its performance obligations. Revenue is measured at the transaction price of the consideration received or receivable, the amount the Company expects to be entitled to.

Payment terms

The sale of goods is typically made under credit payment terms differing from customer to customer and ranges between 0-60 days.

Variable considerations associated with such sales

Periodically, the Company enters into volume or other rebate programs where once a certain volume or other conditions are met, it refunds the customer some portion of the amounts previously billed or paid. For such arrangements, the Company only recognizes revenue for the amounts it ultimately expects to realise from the customer. The Company estimates the variable consideration for these programs using the most likely amount method or the expected value method, whichever approach best predicts the amount of the consideration based on the terms of the contract and available information and updates its estimates each reporting period.

51 Employee Stock Option Plan (''ESOP'') (Contd.)

Since, the 640,431 options are issued to an employee of the subsidiary company as on 31 January 2024 and the Company has an obligation to settle the options provided to the subsidiary''s employees by providing the Company''s equity shares, the Company has measured its obligation with a credit to share option outstanding reserve amounting to H 199.69 lakh in accordance with Ind AS 102, Share based payments, with a corresponding debit to the Company''s investment in the subsidiary company.

52 The Board of Directors of the Company have considered and approved the amalgamation of Haryana Ispat Private Limited, a wholly owned subsidiary, by way of a scheme of amalgamation in its meeting dated 1 February 2024. Thereafter, the scheme has been filed at the Delhi Bench of the Hon''ble National Company Law Tribunal (''the NCLT'') and the approval of the NCLT is awaited.

53 As per Section 128 of the Companies Act, 2013 read with proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 with reference to use of accounting software by the Company for maintaining its books of account, has a feature of recording audit trail of each and every transaction, creating an edit log of each change made in the books of account along with the date when such change were made and ensuring that the audit trail cannot be disabled is applicable with effect from the financial year beginning on 1 April 2023.

The Company uses an accounting software for maintenance of books of account, which records the logs for all the transactions and edit logs for the changes therein. However, the edit logs of events for the changes directly at the database level was enabled at certain specific areas/tables.

Further, accounting software used for payroll processing of the Company is operated by a third party software service provider and the availability of audit trail (edit logs) at the database levels are not covered in the ''Independent Service Auditor''s Assurance Report on the Description of Controls, their Design and Operating Effectiveness'' (''Type 2 report'' issued in accordance with ISAE 3000 (Revised), Assurance Engagements Other than Audits or Reviews of Historical Financial Information).

54 Other statutory information

(i) The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and the rules made thereunder.

(ii) The Company has not been declared willful defaulter by any bank or financial institutions or other lenders.

(iii) The Company does not have any transactions with companies struck off under section 248 of the Companies Act, 2013 or section 560 of the Companies Act, 1956.

(iv) The Company does not have any charges or satisfaction which is yet to be registered with Registrar of Companies (''ROC'') beyond the statutory period.

(v) The Company has complied with number of layers prescribed under clause (87) of section 2 of the Act read with Companies (Restriction on number of Layers) Rules, 2017.

(vi) 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:

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

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

54 Other statutory information (Contd.)

(vii) 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:

- 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

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

(viii) 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 current and preceding year in the tax assessments under the Income-t

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Mar 31, 2023

(8) Provisions and contingent liabilities and contingent assets

A provision is recognised if, as a result of a past event, the Company has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at reporting date, taking into account the risks and uncertainties surrounding the obligation.

When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, the receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably. The expense relating to a provision is presented in the statement of profit and loss net of any reimbursement.

Contingent liabilities are possible obligations that arise from past events and whose existence will only be confirmed by the occurrence or non-occurrence of one or more future events not wholly within the control of the Company. Where it is not probable that an outflow of economic benefits will be required, or the amount cannot be estimated reliably, the obligation is disclosed as a contingent liability, unless the probability of outflow of economic benefits is remote. Contingent liabilities are disclosed on the basis of judgment of the management/independent experts. These are reviewed at each balance sheet date and are adjusted to reflect the current management estimate.

Contingent assets are neither recognised nor disclosed in the financial statements.

(9) Government grants

Grants from government are recognised at their fair value when there is reasonable assurance that the grant will be received and the Company will comply with all the attached conditions.

When the grant relates to a revenue item, it is recognised in statement of profit and loss on a systematic basis over the periods in which the related costs are expensed. The grant can either be presented separately or can deduct from related reported expense.

Government grant relating to capital assets are recognised initially as deferred income and are credited to statement of profit and loss on a straight line basis over the expected lives of the related asset and presented as other operating income within revenue from operations.

(10) Cash and cash equivalents

Cash and cash equivalents in the balance sheet comprise cash at banks and on hand and shortterm deposits with an original maturity of three months or less from the date of acquisition, highly liquid investments that are readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in value.

(11) Foreign currency transactions and translation

Transactions in foreign currencies are initially recorded at the functional currency spot rates at the date the transaction first qualifies for recognition. Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency spot rates of exchange at the reporting date. Exchange differences arising on settlement or

translation of monetary items are recognised in the statement of profit and loss in the year in which it arises.

Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction. The Company uses derivative financial instruments, such as forward currency contracts to hedge its foreign currency risks in respect of its imports and exports. Such derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered into and are subsequently re-measured at fair value. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative. Any gains or losses arising from changes in the fair value of derivatives are taken to the statement of profit and loss.

(12) Revenue

Revenue is measured based on the consideration specified in a contract with a customer and excludes amounts collected on behalf of third parties. A performance obligation is a promise in a contract to transfer a distinct good (or a bundle of goods) to the customer and is the unit of account in Ind AS 115. A contract''s transaction price is allocated to each distinct performance obligation and recognised as revenue, as or when, the performance obligation is satisfied. The Company recognises revenue when it transfers control of a product to a customer. Revenue is measured at the fair value of the consideration received or receivable, taking into account contractually defined terms of payments and excludes tax and duties collected on behalf of the government. The Company recognises revenue from the following major sources:

Sale of products (including scrap sales)

Revenue from sale of products (including scrap sales) is measured based on the consideration specified in a contract with a customer and excludes amounts collected on behalf of third parties. It is measured at fair value consideration received or receivable, net of returns and allowances, trade discounts and volume rebates. The Company recognises revenue when it transfers control over a product to a customer i.e. when goods are delivered at the delivery point, as per terms of the agreement, which could be either customer premises or carrier premises who will deliver goods to the customer. When payments

received from customers exceed revenue recognised to date on a particular contract, any excess (a contract liability) is reported in the Balance Sheet under other current liabilities (see note 27).

Satisfaction of performance obligations

The Company''s revenue is derived from the single performance obligation to transfer primarily products under arrangements in which the transfer of control of the products and the fulfilment of the Company''s performance obligation occur at the same time. Revenue from the sale of goods is recognised when the Company has transferred control of the goods to the buyer and the buyer obtains the benefits from the goods, the potential cash flows and the amount of revenue (the transaction price) can be measured reliably, and it is probable that the Company will collect the consideration to which it is entitled to in exchange for the goods.

Whether the customer has obtained control over the asset depends on when the goods are made available to the carrier or the buyer takes possession of the goods, depending on the delivery terms. For the Company, generally the criteria to recognise revenue has been met when its products are delivered to its customers or to a carrier who will transport the goods to its customers, this is the point in time when the Company has completed its performance obligations. Revenue is measured at the transaction price of the consideration received or receivable, the amount the Company expects to be entitled to.

Payment terms

The sale of goods is typically made under credit payment terms differing from customer to customer and ranges between 0-60 days.

Variable considerations associated with such sales

Periodically, the Company enters into volume or other rebate programmes where once a certain volume or other conditions are met, it gives the customer as volume discount some portion of the amounts previously billed or paid. For such arrangements, the Company only recognises revenue for the amounts it ultimately expects to realise from the customer. The Company estimates the variable consideration for these programmes using the most likely amount method or the expected value method, whichever approach best predicts the amount of the consideration based on the terms of the contract and available information and updates its estimates each reporting period.

Contract assets and contract liabilities

The Company recognises contract liabilities for consideration received in respect of unsatisfied performance obligations and reports these amounts as other liabilities in the balance sheet. Similarly, if the Company satisfies a performance obligation before it receives the consideration, the Company recognises either a contract asset or a receivable in its balance sheet, depending on whether something other than the passage of time is required before the consideration is due.

A contract asset is the right to consideration in exchange for goods or services transferred to the customer. If the Company performs by transferring goods or services to a customer before the customer pays consideration or before payment is due, a contract asset is recognised for the earned consideration when that right is conditional on Company''s future performance. A contract liability is the obligation to transfer goods or services to a customer for which the Company has received consideration (or an amount of consideration is due) from the customer. If a customer pays consideration before the Company transfers goods or services to the customer, a contract liability is recognised when the payment is made or the payment is due (whichever is earlier). Contract liabilities are recognised as revenue when the Company performs under the contract. The Company does not expect to have any contracts where the period between the transfer of the promised goods or services to the customer and payment by the customer exceeds one year. As a consequence, the Company does not adjust any of the transaction prices for the time value of money.

Trade receivables

Trade receivables are amounts due from customers for goods sold in the ordinary course of business and reflects Company''s unconditional right to consideration (that is, payment is due only on the passage of time). Trade receivables are recognised initially at the transaction price as they do not contain significant financing components. The Company holds the trade receivables with the objective of collecting the contractual cash flows and therefore measures them subsequently at amortised cost using the effective interest method, less loss allowance.

Transfer of trade receivables

The Company transfers certain trade receivables under bill discounting arrangements with banks.

These transferred receivables do not qualify for derecognition as the Company retains the credit risk with respect to these transferred receivables due to the existence of the recourse arrangement. Consequently, the proceeds received from such transfers with recourse arrangements are recorded as borrowings from banks and classified under current borrowings.

Income from export incentives

Income from export incentives viz. Duty Drawback are recognised on accrual basis.

(13) Dividend income

Dividend income is recognised at the time when right to receive the payment is established.

(14) Other income

Interest income from financial assets is recognised, when no significant uncertainty as to measurability or collectability exists, on a time proportion basis taking into account the amount outstanding and the applicable interest rate, using the effective interest rate method (EIR).

(15) Operating expenses

Operating expenses are recognised in statement of profit and loss upon utilisation of the service or as incurred.

(16) Employee benefits

16.1 Short term employee benefits

Short- term employee benefit obligations are measured on an undiscounted basis and are expensed as the relative service is provided. A liability is recognised for the amount expected to be paid e.g., under short-term cash bonus, if the Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee, and the amount of obligation can be estimated reliably.

16.2 Defined contribution plan

A defined contribution plan is a postemployment benefit plan under which an entity pays fixed contributions into separate entities and will have no legal or constructive obligation to pay further amounts. Obligations for contributions to defined contribution plans are recognised as an employee benefits expense in the statement of profit and loss in the period during which services are rendered by employees.

The Company pays fixed contribution to government administered provident fund scheme at predetermined rates. The contributions to the fund for the year are recognised as expense and are charged to the statement of profit and loss.

16.3 Defined benefit plan

A defined benefit plan is a post-employment benefit plan other than a defined contribution plan. The Company''s liability towards gratuity is in the nature of defined benefit plans.

The Company''s net obligation in respect of defined benefit plan is calculated separately by estimating the amount of future benefit that employees have earned in return for their service in the current and prior periods; that benefit is discounted to determine its present value. Any unrecognised past service costs are deducted. The discount rate is based on the prevailing market yields of Indian government securities as at the reporting date that have maturity dates approximating the terms of the Company''s obligations and that are denominated in the same currency in which the benefits are expected to be paid.

The calculation is performed annually by a qualified actuary using the projected unit credit method. When the calculation results in a benefit to the Company, the recognised asset is limited to the total of any unrecognised past service costs. Any actuarial gains or losses are recognised in other comprehensive income in the period in which they arise.

16.4 Other long-term employee benefits

Benefits under the Company''s leave encashment constitute other long-term employee benefit.

The employees can carry forward a portion of the unutilised accrued compensated absences and utilise it in future service periods or receive cash compensation on termination of employment. The benefit is discounted to determine its present value. The discount rate is based on the prevailing market yields of Indian government securities as at the reporting date that have maturity dates approximating the terms of the Company''s obligations. The obligation is measured on the basis of independent actuarial valuation using the projected unit credit method.

(17) Lease

Company as a lessee

The Company''s lease asset classes primarily consist of property leases. The Company assesses whether a contract contains a lease, at inception of a contract. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Company assesses whether:

(i) the contract involves the use of an identified asset;

(ii) the Company has substantially all of the economic benefits from use of the asset through the period of the lease; and

(iii) the Company has the right to direct the use of the asset.

At the date of commencement of the lease, the Company recognises a right-of-use asset (“ROU") and a corresponding lease liability for all lease arrangements in which it is a lessee, except for leases with a term of twelve months or less (shortterm leases) and low value leases. For these shortterm and low value leases, the Company recognises the lease payments as an operating expense on a straight-line basis over the term of the lease.

Certain lease arrangements include the options to extend or terminate the lease before the end of the lease term. ROU assets and lease liabilities includes these options when it is reasonably certain that they will be exercised.

The right-of-use assets are initially recognised at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or prior to the commencement date of the lease plus any initial direct costs less any lease incentives. They are subsequently measured at cost less accumulated depreciation and impairment losses.

Right-of-use assets are depreciated from the commencement date on a straight-line basis over the shorter of the lease term and useful life of the underlying asset.

The lease liability is initially measured at amortised cost at the present value of the future lease payments. The lease payments are discounted using the interest rate implicit in the lease or, if not readily determinable, using the incremental borrowing rates in the country of domicile of these leases. Lease liabilities are remeasured with a corresponding adjustment to the related right-of-use asset if the Company changes its assessment if whether it will exercise an extension or a termination option.

(18) Taxes on income

Income-tax expense comprises current and deferred tax. Current tax expense is recognised in the statement of profit and loss except to the extent that it relates to items recognised directly in other comprehensive income or equity, in which case it is recognised in other comprehensive income or equity.

Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted and as applicable at the reporting date, and any adjustment to tax payable in respect of previous years.

Deferred tax is recognised using the balance sheet method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority.

Deferred tax is recognised in the statement of profit and loss except to the extent that it relates to items recognised directly in other comprehensive income or equity, in which case it is recognised in other comprehensive income or equity.

A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which the temporary difference can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.

(19) Earning per share

Basic earnings per equity share is computed by dividing the net profit or loss attributable to equity shareholders of the Company by the weighted average number of equity shares outstanding during the financial year.

Diluted earnings per equity share is computed by dividing the net profit or loss attributable to equity

shareholders of the Company by the weighted average number of equity shares considered for deriving basic earnings per equity share and also the weighted average number of equity shares that could have been issued upon conversion of all dilutive potential equity shares.

(20) Equity, reserves and dividend payment

Equity shares are classified as equity. Incremental costs directly attributable to the issue of new shares are shown in equity as a deduction, net of tax, from the proceeds. Retained earnings include current and prior period retained profits. All transactions with owners of the Company are recorded separately within equity.

(21) Segment reporting

In accordance with Ind AS 108, the operating segments used to present segment information are identified on the basis of internal reports used by the Company''s management to allocate resources to the segments and assess their performance. The Board of Directors is collectively the Company''s ''Chief Operating Decision Maker'' or ''CODM'' within the meaning of Ind AS 108. The indicators used for internal reporting purposes may evolve in connection with performance assessment measures put in place.

(22) Equity investment

Equity investments in joint venture and subsidiaries are measured at cost. The investments are reviewed at each reporting date to determine whether there is any indication of impairment considering the provisions of Ind AS 36 ''Impairment of Assets''. If any such indication exists, policy for impairment of nonfinancial assets is followed.

(23) Cash flow statement

Cash flows are reported using the indirect method, whereby profit before tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.

(24) Dividend payment

A final dividend, including tax thereon, on equity shares is recorded as a liability on the date of approval by the shareholders. An interim dividend, including tax thereon, is recorded as a liability on the date of declaration by the Board of directors.

(25) Financial instruments

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

25.1 Financial assets

Initial recognition and measurement

All financial assets are recognised initially at fair value plus, in the case of financial assets not recorded at fair value through profit or loss, transaction costs that are attributable to the acquisition or issue of the financial asset. However, trade receivables that do not contain a significant financing component are measured at transaction price in accordance with Ind AS 115. Transaction costs of financial assets carried at fair value through profit or loss are expensed in the statement of profit and loss.

Subsequent measurement

(i) Financial assets carried at amortised cost

A financial asset is subsequently measured at amortised cost if it is held within a business model whose objective is to hold the asset in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

(ii) Financial assets at fair value through other comprehensive income (FVOCI)

A financial asset is subsequently measured at fair value through other comprehensive income if it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

(iii) Financial assets at fair value through profit or loss (FVTPL)

A financial asset which is not classified in any of the above categories are subsequently fair valued through the statement of profit and loss.

Derecognition

A financial asset (or, where applicable, a part of a financial asset or part of a Company of similar financial assets) is primarily derecognised (i.e.

removed from the Company''s balance sheet) when:

• The rights to receive cash flows from the asset have expired, or

• The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ''pass-through'' arrangement; and either (a) the Company has transferred substantially all the risks and rewards of the asset, or (b) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

Impairment of financial assets

In accordance with Ind AS 109, the Company applies expected credit loss (ECL) model for measurement and recognition of impairment loss on the following financial assets and credit risk exposure:

(a) Financial assets that are debt instruments, and are measured at amortised cost e.g., loans, debt securities, deposits, trade receivables and bank balance.

(b) Trade receivables using the lifetime expected credit loss model.

For recognition of impairment loss on other financial assets and risk exposure, the Company determines that whether there has been a significant increase in the credit risk since initial recognition. If credit risk has not increased significantly, 12-month ECL is used to provide for impairment loss. However, if credit risk has increased significantly, lifetime ECL is used. If, in a subsequent period, credit quality of the instrument improves such that there is no longer a significant increase in credit risk since initial recognition, then the entity reverts to recognising impairment loss allowance based on 12-month ECL.

25.2 Financial liabilities

Initial recognition and measurement

Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate. All financial liabilities are recognised initially at fair value and, in the case of borrowings and payables, net of directly attributable transaction costs. The Company''s financial liabilities include trade and other payables, borrowings and derivative financial instruments.

Subsequent measurement

The measurement of financial liabilities depends on their classification, as described below:

Financial liabilities at amortised cost

After initial measurement, such financial liabilities are subsequently measured at amortised cost using the EIR method. Gains and losses are recognised in the statement of profit and loss when the liabilities are derecognised as well as through the EIR amortisation process. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in finance costs in the statement of profit and loss. This category generally applies to borrowings, trade payables and other contractual liabilities.

Derecognition

A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the statement of profit and loss.

25.3 Offsetting

Financial assets and liabilities are offset and the net amount is reported in the balance sheet where there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously. The legally enforceable right must not be contingent on future events and must be enforceable in the normal course of business and in the event of default, insolvency or bankruptcy of the Company or the counterparty.

(26) Trade payables

Trade and other payables are initially measured at fair

value, net of transaction costs, and are subsequently

measured at amortised cost, using the effective

interest rate method where the time value of money is significant.

(27) Borrowings

Interest bearing borrowings are initially measured at fair value and are subsequently measured at amortised cost using the effective interest rate method. Any difference between the proceeds (net of transaction costs) and the settlement or redemption of borrowings is recognised over the term of the borrowings in the standalone statement of profit and loss.

D. Significant accounting judgments, estimates and assumptions

The preparation of financial statements requires management to make judgments, estimates and assumptions that may impact the application of accounting policies and the reported value of assets, liabilities, income, expenses and related disclosures concerning the items involved as well as contingent assets and liabilities at the balance sheet date. The estimates and management''s judgments are based on previous experience and other factors considered reasonable and prudent in the circumstances. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected.

In order to enhance understanding of the financial statements, information about significant areas of estimation, uncertainty and critical judgments in applying accounting policies that have the most significant effect on the amounts recognised in the standalone financial statements is as under:

(1) Recognition of deferred tax assets

The extent to which deferred tax assets can be recognised is based on an assessment of the probability of the Company''s future taxable income (supported by reliable evidence) against which the deferred tax assets can be utilised.

(2) Evaluation of indicators for impairment of assets

The evaluation of applicability of indicators of impairment of assets requires assessment of several external and internal factors which could result in deterioration of recoverable amount of the assets.

(3) Contingent liabilities

At each balance sheet date basis the management judgment, changes in facts and legal aspects, the

Company assesses the requirement of provisions against the outstanding contingent liabilities. However, the actual future outcome may be different from this judgement.

(4) Impairment of financial assets

At each balance sheet date, based on historical default rates observed over expected life, existing market conditions as well as forward looking estimates, the management assesses the expected credit losses on outstanding receivables. Further, management also considers the factors that may influence the credit risk of its customer base, including the default risk associated with industry and country in which the customer operates.

(5) Defined benefit obligation (DBO)

Management''s estimate of the DBO is based on a number of underlying assumptions such as standard rates of inflation, mortality, discount rate and anticipation of future salary increases. Variation in these assumptions may significantly impact the DBO amount and the annual defined benefit expenses.

(6) Useful lives of depreciable/amortisable assets

Management reviews its estimate of the useful lives of depreciable/amortisable assets at each reporting date, based on the expected utility of the assets. Uncertainties in these estimates relate to technical and economic obsolescence that may change the utilisation of assets.

(7) Leases

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.

(8) Government grant

Grants receivables are based on estimates for utilisation of the grant as per the regulations as well as analysing actual outcomes on a regular basis and compliance with stipulated conditions. Changes in estimates or non-compliance of stipulated conditions could lead to significant changes in grant income and are accounted for prospectively over the balance life of the asset.

(9) Fair value measurements

Management applies valuation techniques to determine fair value of equity shares (where active market quotes are not available) and stock option. This involves developing estimates and assumptions around volatility, dividend yield which may affect the value of equity shares or stock options.

Estimates and judgements are continuously evaluated. They are based on historical experience and other factors including expectation of future events that may have a financial impact on the Company and that are believed to be reasonable under the circumstances.

b. Terms/rights attached to equity shares

The Company has only one class of equity shares having a par value of '' 2 per share (31 March, 2022: '' 2 per share). Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividend in Indian rupees.

During the year ended 31 March, 2023, the amount of per share final dividend recognised as distributions to equity shareholders is '' 1 per share (31 March, 2022: '' 1 per share) amounting to '' 360.25 Lacs (previous year -'' 360.25 Lacs).

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

iii) General reserve

Under the erstwhile Companies Act 1956, general reserve was created through an annual transfer of net income at a specified percentage in accordance with Companies (Transfer of profits to Reserve) Rules,1975. Consequent to introduction of the Companies Act 2013, there is no such requirement to mandatorily transfer a specified percentage of the net profit to general reserve.

iv) Retained earnings

Retained earnings are created from the profit / loss of the Company, as adjusted for distributions to owners, transfers to other reserves, etc.

v) Equity instruments through other comprehensive income

The Company has elected to recognise changes in the fair value of certain investment in equity instruments in other comprehensive income. These changes are accumulated in this reserve within equity.

a) The term loans (including current maturities) are secured by equitable mortgage of certain land and building at Plot No. 4, 5A, 52, 53, 54 and 54A DLF Industrial Estate, Phase-I, Delhi - Mathura Road and factory land and building situated at Prithla Village, Faridabad and Plot No 109-110, Vemgal Industrial Area, District Kolar, Bangalore, Karnataka and hypothecation of plant and machinery and other property, plant and equipment.

b) The terms and repayment profile of the term loans from banks is below:

(i) Term loan from Punjab National Bank carries an interest of 8.35% and is repayable in 60 monthly instalments commencing from August 2019 with last instalment due on May 2024.

(ii) Term loan from State Bank of India carries an interest of 8.15% and is repayable in 60 monthly instalments commencing from January 2020 with last instalment due on December 2024.

(iii) Term loan from HDFC Bank carries an interest in the range of 8.60% to 9.25% and is repayable in 51 - 60 monthly instalments commencing from December 2019 with last instalment due on March 2028.

c) There has been no default in servicing of loan during the year.

d) The term loans have been used for the specific purpose for which they were availed.

e) The Company has complied with the relevant financial covenants under the terms of borrowings throughout the reporting period.

Note:

a) The cash credit facilities and working capital demand loan are secured by hypothecation of all inventories including those in transit, receivables, book debts on pari passu basis, equitable mortgage of land and building situated at Plot No 4, 5A, 52, 53,54 and 54A DLF Industrial Estate, Phase-I, Delhi- Mathura Road and factory land and building situated at Prithla Village, Faridabad and Plot No 109-110, Vemgal Industrial Area, District Kolar, Bangalore, Karnataka.

b) The outstanding balance of cash credit facilities is repayable on demand and the rate of interest ranges between 6.85% to 8.65% (31 March, 2022: 7.00% to 7.60%) per annum .

c) The outstanding balance of working capital demand loan is repayable within a period 30 days and the rate of interest ranges between 5% to 7% (31 March, 2022: 5.0% to 5.9%) per annum.

39 Employee benefits

i) Defined contribution plans

The Company makes fixed contribution towards provident fund and Employees'' State Insurance (ESI) for qualifying employees. The provident fund plan is operated by the Regional Provident Fund Commissioner and the Company is required to contribute a specified percentage of payroll cost to fund the benefits. Similarly, the contribution is made in ESI at a specified percentage of payroll cost.

The Company recognised '' 223.11 Lacs (31 March, 2022: '' 215.39 Lacs) for provident fund contributions and '' 10.65 Lacs (31 March, 2022: '' 11.59 Lacs) for ESI contributions in the Standalone Statement of Profit and Loss and included in “Employee benefits expenses" in note 33. The contribution payable to these plans by the Company is at rates specified in the rules of the schemes.

ii) Defined benefit plans Gratuity

Contribution to Gratuity funds- Life Insurance Corporation of India, Group Gratuity Scheme

The Company provides for gratuity for employees in India as per the Payment of Gratuity Act, 1972. Employees who are in continuous service for a period of 5 years are eligible for gratuity. The amount of gratuity payable on retirement/termination is the employees last drawn basic salary per month computed proportionately for 15 days salary multiplied for the number of years of service. The gratuity plan is a funded plan and the Company makes contribution to recognised funds in India. The unfunded gratuity obligation of directors is determined based on actuarial valuation using the Projected Unit Credit Method.

The sensitivity analysis above have been determined based on a method that extrapolates the impact on defined benefit obligation as a result of reasonable changes in key assumptions occurring at the end of the reporting year. This analysis may not be representative of the actual change in the defined benefit obligations as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.

The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the previous year.

D) Risk exposure

i) Changes in discount rate

A decrease in discount yield will increase plan liabilities.

ii) Mortality table

The gratuity plan obligations are to provide benefits for the life of the member, so increases in life expectancy will result in an increase in plan liabilities.

iii) Salary increase

Actual salary increase will increase the plan''s liabilities. Increase in salary rate assumption in future valuation will also increase the valuation.

iii) Other long-term employee benefit plans

The Company provides for compensated absences to its employees. Since the compensated absences do not fall due wholly within twelve months after the end of the period in which the employees render the related service and are also not expected to be utilised wholly within twelve months after the end of such period, the benefit is classified as a other long-term employee benefit. The Company records an obligation for such compensated absences in the period in which the employee renders the services that increase this entitlement. The scheme is unfunded and liability for the same is recognised on the basis of actuarial valuation. A provision of '' 51.96 Lacs (31 March, 2022: '' 41.39 Lacs) for the year have been made on the basis of actuarial valuation as at the year end and debited to the Standalone Statement of Profit and Loss. As at 31 March, 2023, provision for compensated absences amounts to '' 180.49 Lacs (31 March, 2022 - '' 139.59 Lacs) presented as provisions for employee benefit obligations in note 21 - Provisions.

40 Operating segments

In accordance with Ind AS 108 ''Operating Segments'', the Board of Directors of the Company, being the chief operating decision maker of the Company has determined “Automotive components" as the only operating segment.

Further, in terms of paragraph 31 of Ind AS 108, entity wide disclosures have been presented in the consolidated financial statements which are presented in the same financial report.

41 Contingent liabilities, contingent assets and commitments

A. Capital commitment:

(i) Estimated amount of contracts remaining to be executed on the capital account and not provided for in the books of account (net of capital advances) '' 190.68 Lacs ('' 820.37 Lacs as at 31 March, 2022).

(ii) The Company vide memo no. 3278 dated 14 May, 2013 had paid certain amounts to Senior Town Planner, Faridabad Circle, Faridabad, for the “change in land use" of part of the land situated at its Prithla unit. As per the agreed terms, there would be certain external development charges, scrutiny fees, etc. which are payable at a future date, if any variation is carried out at this said unit. However, the quantum of such future liability is not quantified in the said letter.

a) Service tax demand amounting to '' 106.04 Lacs for the period April 2014 to June 2017 was due to disallowance of the Cenvat Credit on outward transportation of final product to the buyer''s premises. Representation against the aforementioned demand were filed before the Joint Commissioner of Central Tax, Faridabad, Haryana. On 4 June, 2021, the Company has received an unfavourable order from the Joint Commissioner. On 2 August,

2021, the Company had filed an appeal against the aforesaid order with the Commissioner Appeals, however, the Company has received an unfavourable order from the Commissioner Appeals vide order dated 25 February,

2022. The Company has filed an appeal, on 26 May, 2022, against the said demand/order with Customs Excise and Service Tax Appellate Tribunal (''CESTAT''), Chandigarh and remains confident of getting a relief against the said order.

Excise duty demand amounting to '' 181.40 Lacs for the period January 2013 to June 2017 under the Central Excise Act is owing to dispute regarding not adding the value of drawings/designs and specifications in the cost of moulds/dies. The Company had submitted requisite responses before the Additional Director General (Adjn.), Director General of Goods and Services Tax Intelligence, New Delhi. During the current year, Additional Director General (Adjn.), vide order no 48-67/2022 CE dated 29 July, 2022, has dropped the demand to '' 8.26 Lacs in this case. The Company has filed an appeal, on 16 November, 2022, against the said order with Customs Excise and Service Tax Appellate Tribunal (''CESTAT''), Delhi and remains confident of a favourable outcome on the above.

b) Interest amounting to '' 70.25 Lacs (31 March, 2022 - '' 153.55 Lacs) on the demands raised by excise authorities has been calculated by the Company based on the demand cum show-cause notices pending adjudication.

c) Demand under GST amounting to '' 50.00 Lacs raised during the year vide show cause notice reference no. ZD060922013840M dated 21 September, 2022, pertaining to mismatch of input tax credit in GSTR-3B and GSTR-2A/2B for the financial year 2019-20. The Company has submitted reply to the said show cause notice vide letter dated 27 October, 2022. The Company is of the view that the issues raised by revenue do not have sufficient statutory backing and the Company''s stand is supported by various favourable judicial precedents. The Company believes that it has a strong case to argue and remains confident of getting a relief against the said demand.

The Company has no other material contingent liabilities other than those disclosed above, which could devolve upon the Company.

It is not practicable for the Company to estimate the timings of the cash flows, if any, in respect of the above pending resolution of the respective proceedings. The Company has assessed that it is only possible, but not probable, that outflow of economic resources will be required in respect of the above proceedings.

d) “The Company, during the year, has filed for the redemption/fulfilment of the export obligations in respect of eight licenses under Export Promotion Capital Goods (''EPCG'') scheme with the relevant authorities. Basis such filling, the Company has fulfilled the export obligations in respect of the said eight licenses and the Export Obligation Discharge Certificate (''EODC'') in respect of the same are awaited as at the date of approval of these standalone financial statements.

Further, with respect to one license, the management has performed a detailed assessment and concluded that the Company will be able to fulfil a part of the export obligation in respect of this license and proportionate duty on the un-fulfilled export obligation will be payable by the Company to the authorities. The Company has assessed that adequate liability for payment of the said duty in respect of the aforesaid license is existing in the books of accounts and estimated interest liability amounting to '' 329.23 Lacs on foreclosure of this licence has been recognised in the standalone statement of profit and loss account (refer note 37).

Export obligation disclosed under other commitments [refer note 41(B)] as at the year end represents export obligation in respect of the one license where the export obligation is pending."

The lease liabilities are secured by the related underlying assets. The maturity analysis of lease liabilities are disclosed in note 45(II)(B)(ii).

Lease payments not recognised as a liability

The Company has elected not to recognise a lease liability for short-term leases (leases with an expected term of 12 months or less) or for leases of low value assets. Payments made under such leases are expensed on a straight-line basis. The Company does not have any liability to make variable lease payments for the right-to-use the underlying asset recognised in the financial statements.

The expense relating to payments not included in the measurement of the lease liability for short term leases is '' 56.60 Lacs (31 March, 2022 - '' 45.11 Lacs).

Total cash outflow for leases for the year ended 31 March, 2023 was '' 103.80 Lacs (31 March, 2022 - '' 114.86 Lacs) [including '' 56.60 Lacs (31 March, 2022 - '' 45.11 Lacs) paid towards the aforementioned short-term leases].

43 Related party disclosures

In accordance with the requirement of Indian Accounting Standard (Ind AS) 24 “Related Party Disclosures", name of the related party, related party relationship, transactions and outstanding balances including commitments where control exists and with whom transactions have taken place during the reported period are as follows:

45 Fair value measurements I Financial instruments

(a) Financial instruments by category

Derivative financial instruments and investment in mutual funds are measured at fair value through profit or loss. Investment in equity instruments (except investments in subsidiaries and joint venture company) are measured at fair value through other comprehensive income. Other than the aforementioned, all other financial assets and liabilities viz. trade receivables, security deposits, cash and cash equivalents, other bank balances, interest receivable, other receivables, trade payables, employee related liabilities and borrowings, are measured at amortised cost.

(b) Fair value hierarchy

This section explains the judgments and estimates made in determining the fair values of the financial instruments that are (a) recognised and measured at fair value and (b) measured at amortised cost and for which fair values are disclosed in the standalone financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into the three levels prescribed under the accounting standard. An explanation of each level follows underneath the table.

The following table shows the carrying amounts and fair values of financial assets and financials liabilities, including their levels of in the fair value hierarchy:

The Company has an established control framework with respect to the measurement of fair values. The finance and accounts team that has overall responsibility for overseeing all significant fair value measurements and reports directly to the board of directors. The team regularly reviews significant unobservable inputs and valuation adjustments. If third party information, such as broker quotes or pricing services, is used to measure fair values, then the team assesses the evidence obtained from the third parties to support the conclusion that these valuations meet the requirements of Ind AS, including the level in the fair value hierarchy in which the valuations should be classified. Significant valuation issues are reported to the Company''s board of directors.

Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows.

Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices)

Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).

There have been no transfers within the levels for the year ended 31 March, 2023 and 31 March, 2022.

Fair value of financial assets and liabilities measured at amortised cost

The carrying amounts of short-term trade and other receivables, trade payables, cash and cash equivalents and other bank balances are considered to be the same as their fair values, due to their short-term nature.

For other financial liabilities/ assets that are not measured at fair value, the carrying amounts are considered equal to their respective fair values.

II. Financial risk management

The Company''s principal financial liabilities comprise borrowings, lease liabilities, trade payables and other payables. The Company''s principal financial assets include trade and other receivables, investments and cash and bank balances that it derives directly from its operations.

The Company has exposure to the following risks arising from financial instruments:

- credit risk;

- liquidity risk; and

- market risk

This note presents information about the Company''s exposure to each of the above risks, the Company''s objectives, policies and processes for measuring and managing risk.

A. Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations resulting in a financial loss to the Company. Credit risk arises principally from trade receivables, loans and advances, cash and cash equivalents and deposits with banks.

Trade receivables

The Company primarily sells high tensile cold forged fasteners to bulk customers comprising mainly automotive manufacturers operating in India and outside India. The Company''s exposure to credit risk is influenced mainly by the individual characteristics of each customer. However, management also considers the factors that may influence the credit risk of its customer base, including the default risk of the industry and country in which customers operate.

Cash and cash equivalents, other bank balances and deposits with banks

Cash and cash equivalents and other bank balances of the Company are held with banks which have high external rating. The Company considers that its cash and cash equivalents and other bank balances have low credit risk based on the external credit ratings of the counterparties.

Loans to employees, security deposits and other financial assets

The Company provides loans to its employees and furnish security deposit to various parties for electricity, communication, etc.. The Company considers that its loans have low credit risk or negligible risk of default as the parties are well established entities and have strong capacity to meet the obligations. Other financial assets majorly includes receivables from scrap sales wherein the Company monitors the credit risk of

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Mar 31, 2018

1. COMPANY INFORMATION AND SIGNIFICANT ACCOUNTING POLICIES

A. Reporting Entity

Sterling Tools Limited (the “Company”) is a company limited by shares is incorporated on 7 June, 1979 and domiciled in India (CIN: L29222DL1979PLC009668). The address of the Company’s registered office is K-40, Connaught Circus, New Delhi-110001. The equity shares of the Company is listed on Bombay Stock Exchange and National Stock Exchange in India. The Company is engaged in the manufacturing and marketing of high tensile cold forged fasteners. It is one of the progressive Original Equipment Manufacturer (OEM) suppliers in India with a client base that spans automotive companies in India, Europe and USA.

B. Basis of preparation

(1) Statement of compliance

These financial statements are prepared on accrual basis of accounting and comply with the Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015 and subsequent amendments thereto, the Companies Act, 2013 (to the extent notified and applicable). These are Company’s first Ind AS compliant standalone financial statements and Ind AS 101 ‘First Time Adoption of Indian Accounting Standards’ has been applied.

For all the periods upto and including 31 March 2017, the Company prepared its financial statements in accordance with Generally Accepted Accounting Principles (GAAP) in India, accounting standards specified under Section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014, the relevant provisions of the Act to extent applicable. The Company followed the provisions of Ind AS 101 in preparing its opening Ind AS Balance Sheet as of the date of transition, viz. 1 April 2016. Some of the Company’s Ind AS accounting policies used in the opening Balance Sheet are different from its previous GAAP policies applied as at 31 March 2016, and accordingly the adjustments were made to restate the opening balances as per Ind AS. The resulting adjustments arose from events and transactions before the date of transition to Ind AS. Therefore, as required by Ind AS 101, those adjustments were recognised directly through retained earnings as at 1 April 2016. This is the effect of the general rule of Ind AS 101 which is to apply Ind AS retrospectively.

An explanation of how the transition to Ind AS has affected the reported financial position, financial performance and cash flows of the Company is provided in note 46.

These financial statements of Sterling Tools Limited as at and for the year ended 31 March 2018 (including comparatives) were approved and authorised for issue by Board of Directors on 23 May 2018.

(2) Standards issued but not yet effective

The following Indian accounting standards were issued but these were not yet effective as on 31 March 2018:

Ind AS 115, “Revenue from Contracts with Customers”

Ind AS 115 provides a single, principles based five-step model to be applied to all contracts with customers. The five steps in the model are as follows:

- Identify the contract with the customer

- Identify the performance obligations in the contract

- Determine the transaction price

- Allocate the transaction price to the performance obligations in the contracts

- Recognize revenue when (or as) the entity satisfies a performance obligation.

Guidance is provided on topics such as the point in which revenue is recognized, accounting for variable consideration, costs of fulfilling and obtaining a contract and various related matters. New disclosures about revenue are also introduced Ind AS 115 is effective for fiscal years beginning on or after January 1, 2018.

The management believes that the impact of the above standard is not likely to be material.

(3) Basis of measurement

The financial statements have been prepared on the historical cost basis except for the following items:

The methods used to measure fair values are discussed further in notes to financial statements.

(4) Functional and presentation currency

These financial statements are presented in Indian Rupees (Rs.), which is also the Company’s functional currency. All financial information presented in Indian Rupees has been rounded to the nearest lakh (upto two decimals), except as stated otherwise.

(5) Current and non-current classification

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

An asset is current when it is:

- Expected to be realised or intended to be sold or consumed in normal operating cycle;

- Held primarily for the purpose of trading;

- Expected to be realised within twelve months after the reporting period; or

- Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

Current assets include current portion of non-current financial assets.

All other assets are classified as non-current.

A liability is current when:

- It is expected to be settled in normal operating cycle;

- It is held primarily for the purpose of trading;

- It is due to be settled within twelve months after the reporting period; or

- There is no unconditional right to defer settlement of the liability for at least twelve months after the reporting period.

Current liabilities include current portion of non-current financial liabilities.

All other liabilities are classified as non-current.

Deferred tax assets/liabilities are classified as non-current.

Operating cycle

Operating cycle is the time between the acquisition of assets for processing and their realisation in cash or cash equivalents.

(6) Measurement of fair values

A number of the Company’s accounting policies and disclosures require the measurement of fair values, for financial assets and liabilities.

The Company has an established control framework with respect to the measurement of fair values. This includes a central valuation team that has overall responsibility for overseeing all significant fair value measurements, including Level 3 fair values, and reports directly to the board of directors.

The central valuation team regularly reviews significant unobservable inputs and valuation adjustments. If third party information, such as broker quotes or pricing services, is used to measure fair values, then the central valuation team assesses the evidence obtained from the third parties to support the conclusion that these valuations meet the requirements of Ind AS, including the level in the fair value hierarchy in which the valuations should be classified.

Significant valuation issues are reported to the Company’s board of directors.

Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows:

-Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.

-Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices)

-Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).

When measuring the fair value of an asset or a liability, the Company uses observable market data as far as possible. If the inputs used to measure the fair value of an asset or a liability fall into different levels of the fair value hierarchy, then the fair value measurement is categorised in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement.

The Company recognises transfer between levels of the fair value hierarchy at the end of the reporting period during which the change has occurred.

Further information about the assumptions made in measuring fair values is included in the following notes:

- Note 44- financial instruments

* Represents deemed cost on the date of transition to Ind AS. Gross block and accumulated depreciation from the previous GAAP have been disclosed for the purpose of better understanding of the original cost of assets.

Notes:

a. Refer note a of Note 19 “Non current financial liabilities- Borrowings” for details regarding property, plant and equipment which are pledged as security for obtaining long-term borrowings.

b. Refer Note 40 for disclosure of contractual commitments for the acquisition of property, plant and equipment.

a. All amounts are short-term. The net carrying value of trade receivables is considered a reasonable approximation of fair value.

b. Amount due from Sterling Fabory India Private Limited- joint venturer company- Rs. 26.78 lakh (31 March 2017- Rs. 2.64 lakh, 1 April 2016- Rs. 4.26 lakh)

b. Terms/rights attached to equity shares

The Company has only one class of equity shares having a par value of Rs 2 per share (31 March 2017: Rs 2 per share; 1 April 2016: Rs 10 per share). Each holder of equity shares is entitled to one vote per share. The company declares and pays dividend in Indian rupees.

During the year ended 31 March 2018, the amount of per share interim dividend recognised as distributions to equity shareholders is Rs. 10 per share (31 March 2017: Rs 10 per share; 1 April 2016: Rs 15 per share).

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

d. During the period ended 31 March 2017, the Company has subdivided each equity shares of face value of Rs 10 each into 5 (five) equity shares of Rs 2 each with effect from 10 January 2017 duly approved by the shareholders through Postal Ballot on 20 December 2016.

e. No shares have been issued pursuant to contract without payment being received in cash, allotted as fully paid-up shares by way of bonus issues nor has any bought back of shares happened during the period of five years immediately preceding the reporting date.

a) The term loans are secured by equitable mortgage of certain land and building at Plot No. 4, 5A, 52, 53, 54 & 54A DLF Industrial Estate, Phase-I, Delhi - Mathura Road and factory land and building situated at Prithla Village, Faridabad and hypothecation of plant and machinery and other property, plant and equipment and personal guarantee by some of the directors of the Company

b) The repayment profile of the term loans from banks is as set out below:

Note:

a) The working capital facilities include working capital demand loan, cash credit and buyers/ suppliers credit. The same are secured by hypothecation of all inventories including those in transit, receivables, book debts on pari passu basis, equitable mortgage of land and building situated at Plot No 4, 5A, 52, 53,54 & 54A DLF Industrial Estate, Phase-I, Delhi- Mathura Road and factory land and building situated at Prithla Village, Faridabad and personal guarantee by some of the directors of the Company.

b) The outstanding balance is repayable on demand and the rate of interest ranges between 9 % to 11 % per annum.

7 Employee benefits

i) Defined contribution plans

The Company makes fixed contribution towards provident fund and ESI to a defined contribution retirement benefit plan for qualifying employees. The provident fund plan is operated by the Regional Provident Fund Commissioner and the Company is required to contribute a specified percentage of payroll cost to the retirement benefit schemes to fund the benefits. Similarly, the contribution is made in ESI at a specified percentage of payroll cost.

The Company recognised Rs 193.06 lakh (31 March 2017: Rs 179.78 lakh) for provident fund contributions and Rs 36.19 lakh (31 March 2017: Rs 20.62 lakh) for ESI contribution in the Statement of Profit and Loss and included in “‘‘Employee benefits expenses”” in note 33. The contribution payable to these plans by the Company is at rates specified in the rules of the schemes.

ii) Defined benefit plans Gratuity

Contribution to Gratuity funds- Life Insurance Corporation of India, Group Gratuity Scheme

The Company provides for gratuity for employees in India as per the Payment of Gratuity Act, 1972. Employees who are in continuous service for a period of 5 years are eligible for gratuity. The amount of gratuity payable on retirement/termination is the employees last drawn basic salary per month computed proportionately for 15 days salary multiplied for the number of years of service. The gratuity plan is a funded plan and the Company makes contribution to recognised funds in India. From the period ended 31 March 2017, the unfunded gratuity obligation of directors starting from current financial year is determined based on actuarial valuation using the Projected Unit Credit Method.

The estimates of future salary increases considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market

C) Sensitivity analysis

Reasonably possible changes at the reporting date to one of the relevant actuarial assumptions, holding other assumptions constant, would have affected the defined benefit obligation by the amounts shown below.

The sensitivity analysis above have been determined based on a method that extrapolates the impact on defined benefit obligation as a result of reasonable changes in key assumptions occurring at the end of the reporting period. This analysis may not be representative of the actual change in the defined benefit obligations as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.

The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the prior period.

D) Risk exposure

i) Changes in discount rate

A decrease in discount yield will increase plan liabilities.

ii) Mortality table

The gratuity plan obligations are to provide benefits for the life of the member, so increases in life expectancy will result in an increase in plan liabilities.

The weighted average duration of the defined benefit plan obligation at the end of the reporting period is 14.01 years (31 March 2017: 14.52 years, 1 April 2016: 10.97 years).

Expected contribution to post-employment benefit plans in the next year is Rs 46.55 lakh (31 March 2017: Rs 27.70 lakh).

The weighted average duration of the defined benefit plan obligation at the end of the reporting period is 1.95 years (31 March 2017: 12.58 years, 1 April 2016: Nil years).

Expected contribution to post-employment benefit plans in the next year is Rs 26.86 lakh (31 March 2017: Rs 7.71 lakh).

iii) Other long-term employee benefit plans

The Company provides for compensated absences to its employees. Since the compensated absences do not fall due wholly within twelve months after the end of the period in which the employees render the related service and are also not expected to be utilised wholly within twelve months after the end of such period, the benefit is classified as a long-term employee benefit. The Company records an obligation for such compensated absences in the period in which the employee renders the services that increase this entitlement. The scheme is unfunded and liability for the same is recognised on the basis of actuarial valuation. A provision of Rs. 15.49 lakh (31 March 2017: Rs. 44.28 lakh) for the year have been made on the basis of actuarial valuation as at the year end and debited to the Statement of Profit and Loss.

8 Operating segments

Segment information is presented in respect of the Company’s key operating segments. The operating segments are based on the Company’s management and internal reporting structure.

The Company’s Board of directors have been identified as the Chief Operating Decision Maker (‘CODM’) as they monitors the results for the purpose of making decisions about resource allocation and performance assessment and responsible for all major decision w.r.t. preparation of budget, planning, expansion, alliance, joint venture, merger and acquisitions, and expansion of new facility.

Accordingly, there is only one reportable segment for the Company which is “”Automotive products””, hence no specific disclosures have been made.”

Entity wide disclosures

A. Information about products and services

The Company is engaged in the manufacturing and marketing of high tensile cold forged fasteners. Company operates in one product line, therefore product wise revenue disclosure is not applicable.

B. Information about geographical area

The major sales of the Company are made to customers which are domiciled in India.

C. Information about major customers

Revenues of Rs 11,857.53 lakh and Rs 6,823.50 lakh (31 March 2017: Rs 9,142.86 lakh and Rs 5,036.52 lakh) are derived from a two external customers.

9 Contingent liabilities, contingent assets and commitments

A. Capital Commitment:

Estimated amount of contracts remaining to be executed on the capital account and not provided for in the account (net of capital advances) Rs. 2,059.46 lakh (Rs. 138.28 lakh as at 31 March 2017, Rs. 493.54 lakh as at 1 April 2016).

The Company in 2014-15 had paid amounts to Senior Town Planner, Faridabad Circle, Faridabad, for the “change in land use” of part of the land situated at its Prithla unit. As per the agreed terms, there will be certain external development charges which are payable on a future date. However, the quantum of such future liability is not quantified in the said letter.

a) Excise demand amounting to Rs 39.90 lakh for the period February 2010 to March 2010 and Rs 53.27 lakh for the period November 2010 to January 2011 under Central Excise Act arised due to dispute regarding assessable value with reference to MRP against which appeals were filed before the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), New Delhi. These demand orders are still in the dispute till final adjudication.

b) Interest amounting to Rs. 48.89 lakh on the demands raised by excise authorities has been calculated by the Company based on the fact mentioned in demand cum show-cause notices pending adjudication.

c) Haryana tax tribunal, Chandigarh passed the order dated 22 February 2017 in favour of the assesse on account of sale of capital good (cars).

d) The office of the Commissioner of Central Excise Audit and Service Tax, Faridabad-I, has dropped the proceedings initiated against the Company for Rs. 222.26 lakh as disclosed under point no. (vii) above, vide order No. 02/16-17/Commr/YG/FBD-I dated 27-04-2016.

C. Contingent assets- Nil

10 Operating lease as lessee

The Company has entered into various agreements of cancellable and non-cancellable operating lease for factory premises, nitrogen plant, transformer and offices rent amounting to Rs. 48.72 lakh (31 March 2017: Rs. 87.90 lakh) has been debited to Statement of Profit and Loss for the year ending 31 March 2018. The future minimum lease payment is as under:

11 Related party disclosures

In accordance with the requirement of Indian Accounting Standard (Ind AS) 24 “Related Party Disclosures”, name of the related party, related party relationship, transactions and outstanding balances including commitments where control exist and with whom transactions have taken place during the reported period are as follows:

III Terms and conditions

All transactions were made on normal commercial terms and conditions. All outstanding balances are unsecured and are repayable in cash.

12 Corporate social responsibility expenses

(a) Gross amount required to be spent by the Company (i.e. 2% of average net profits u/s 198 of Companies Act, 2013 of last three years): Rs. 86.52 lakh

(b) Amount spent during the year ended 31 March 2018:

(a) Gross amount required to be spent by the Company (i.e. 2% of average net profits u/s 198 of Companies Act, 2013 of last three years): Rs. 64.83 lakh

(b) Amount spent during the year ending 31 March 2017:

13 fair value measurements I financial instruments

(a) Financial instruments by category

Except derivative financial instruments which are measured at fair value through profit or loss, all other financial assets and liabilities viz. trade receivables, security deposits, cash and cash equivalents, other bank balances, interest receivable, other receivables, trade payables, employee related liabilities and short-term loans from banks, are measured at amortised cost.

(b) Fair value hierarchy

This section explains the judgments and estimates made in determining the fair values of the financial instruments that are (a) recognised and measured at fair value and (b) measured at amortised cost and for which fair values are disclosed in the standalone financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into the three levels prescribed under the accounting standard. An explanation of each level follows underneath the table.

The Company has an established control framework with respect to the measurement of fair values. The finance and accounts team that has overall responsibility for overseeing all significant fair value measurements and reports directly to the board of directors. The team regularly reviews significant unobservable inputs and valuation adjustments. If third party information, such as broker quotes or pricing services, is used to measure fair values, then the team assesses the evidence obtained from the third parties to support the conclusion that these valuations meet the requirements of Ind AS, including the level in the fair value hierarchy in which the valuations should be classified. Significant valuation issues are reported to the Company’s board of directors.

Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows.

Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs). There have been no transfers in either direction for the year ended 31 March 2018 and 31 March 2017. Measurement of fair values

Valuation techniques and significant unobservable inputs Financial instruments measured at fair value

Fair value of financial assets and liabilities measured at amortised cost

The carrying amounts of short-term trade and other receivables, trade payables, cash and cash equivalents and other bank balances are considered to be the same as their fair values, due to their short-term nature.

For other financial liabilities/ assets that are measured at fair value, the carrying amounts are equal to the fair values.

I. Financial risk management

The Company’s principal financial liabilities comprise borrowings, derivatives, trade payables and other payables. The Company’s principal financial assets include trade & other receivables, and cash and shortterm deposits that it derive directly from its operations.

The Company has exposure to the following risks arising from financial instruments:

- credit risk;

- liquidity risk; and

- market risk

This note presents information about the Company’s exposure to each of the above risks, the Company’s objectives, policies and processes for measuring and managing risk.

A. Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations resulting in a financial loss to the Company. Credit risk arises principally from trade receivables, derivative financial instruments, loans and advances, cash and cash equivalents and deposits with banks.

Trade receivables

The Company primarily sells high tensile cold forged fasteners to bulk customers comprising mainly automotive manufacturers operate in India and outside India. The Company’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. However, management also considers the factors that may influence the credit risk of its customer base, including the default risk of the industry and country in which customers operate. Further details of concentration of revenue are included in Note 39(C).

Cash and cash equivalents and deposits with banks

Cash and cash equivalents of the Company are held with banks which have high external rating. The Company considers that its cash and cash equivalents have low credit risk based on the external credit ratings of the counterparties.

Loans to employees and securities deposits

The Company provides loans to its employees and furnish security deposit to various parties for electricity, communication, etc.. The Company considers that its loans have low credit risk or negligible risk of default as the parties are well established entities and have strong capacity to meet the obligations.

Investments

The Company have invested in unquoted equity instruments of its subsidiary and its joint venture. The management actively monitors the operation of subsidiary and joint venture which affect investments. The Company does not expect the counterparty to fail to meet its obligations, and has not experienced any significant impairment losses in respect of any of the investments.

Provision for expected credit losses

(a) Financial assets for which loss allowance is measured using 12 month expected credit losses

The Company has assets where the counter- parties have sufficient capacity to meet the obligations and where the risk of default is very low. Hence, no impairment loss has been recognised during the reporting periods in respect of these assets.

(b) Financial assets for which loss allowance is measured using life time expected credit losses

The Company has customers with strong capacity to meet the obligations and therefore the risk of default is negligible in respect of outstanding from customers. Further, management believes that the unimpaired amounts that are past due by more than 30 days are still collectible in full. Hence, no impairment loss has been recognised during the reporting periods in respect of trade receivables.

Ageing analysis of trade receivables

The ageing analysis of the trade receivables is as below:

B. Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset.

The Company’s principal sources of liquidity are cash and cash equivalents and the cash flow that is generated from operations. The Company believes that the working capital is sufficient to meet its capital requirements. Accordingly, no liquidity risk is perceived.

As at 31 March 2018, the Company had a working capital of Rs 10,911.25 lakh including cash and cash equivalents of Rs 100.84 lakh. As at 31 March 2017, the Company had a working capital of Rs 4,290.86 lakh including cash and cash equivalents of Rs 228.91 lakh.

C. Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates and interest rates will affect the Company’s income. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.

The Board of directors is responsible for setting up of policies and procedures to manage market risks of the company. The Company is carrying out imports of certain raw materials and capital goods and exports finished goods which are denominated in the currency other than the functional currency of the Company which exposes it to foreign currency risk. In order to minimise the risk, the Company executes forwards contract w.r.t purchases and sale made in currency other than functional currency, the foreign exchange exposure of the Company is ascertained on the basis of the progress billings and purchase orders issued.

D. Currency risk

The Company is exposed to foreign currency risk on certain transactions that are denominated in a currency other than entity’s functional currency, hence exposure to exchange rate fluctuations arises. The risk is that the functional currency value of cash flows will vary as a result of movements in exchange rates.

The currency profile of financial assets and financial liabilities are as below:

Sensitivity analysis

A strengthening of the Indian Rupee, as indicated below, against foreign currency at 31 March would have increased (decreased) profit or loss (before tax) by the amounts shown below. This analysis is based on foreign currency exchange rate variances that the company considered to be reasonably possible at the end of the reporting period. The analysis assumes that all other variables, in particular interest rates, remain constant. The analysis is performed on the same basis for previous year, except that the reasonably possible foreign exchange rate variances were different, as indicated below.

E. Interest rate risk

The Company is exposed to interest rate risk arising mainly from non-current and current borrowings with floating interest rates. The Company is exposed to interest rate risk because the cash flows associated with floating rate borrowings will fluctuate with changes in interest rates.

At the reporting date the interest rate profile of the Company’s interest-bearing financial instruments is as follows:

Fair value sensitivity analysis for fixed-rate instruments

The company’s fixed rate instruments are carried at amortised cost. They are therefore not subject to interest rate risk, since neither the carrying amount nor the future cash flows will fluctuate because of a change in market interest rates.

Cash flow sensitivity analysis for variable-rate instruments

A change of 100 basis points in interest rates at the reporting date would have increased (decreased) profit or loss (before tax) by the amounts shown below. This analysis assumes that all other variables, in particular foreign currency rates, remain constant. The analysis is performed on the same basis for the previous year.

14 Capital management

The Company’s objectives when managing capital are to:

- safeguard its ability to continue as a going concern, so that it can continue to provide returns for shareholders and benefits for other stakeholders and

- maintain an appropriate capital structure of debt and equity.

The Board of Directors has the primary responsibility to maintain a strong capital base and reduce the cost of capital through prudent management in deployment of funds and sourcing by leveraging opportunities in domestic and international financial markets so as to maintain investors, creditors and markets’ confidence and to sustain future development of the business.

The Company monitors capital, using a medium term view of three to five years, on the basis of a number of financial ratios generally used by industry. The Company is not subject to externally imposed capital requirements.

The Company monitors capital using gearing ratio which is net debt divided by total equity. Net debt comprises of long term and short term borrowings less cash and cash equivalents. Equity includes equity share capital and reserves that are managed as capital. The gearing ratio at the end of the reporting periods was as follows:

15 First time adoption of Ind AS

These are the Company’s first financial statements in accordance with Ind AS. For periods up to and including the year ended 31 March 2017, the Company prepared its financial statements in accordance with previous GAAP, including accounting standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended). The effective date for Company’s Ind AS opening Balance Sheet is 1 April 2016 (the date of transition to Ind AS).

The accounting policies set out in Note 1 have been applied in preparing the financial statements for the year ended 31 March 2018, the comparative information presented in these financial statements for the year ended 31 March 2017 and in the preparation of an opening Ind AS Balance Sheet at 1 April 2016 (the Company’s date of transition). According to Ind AS 101, the first Ind AS financial statements must use recognition and measurement principles that are based on standards and interpretations that are effective at 31 March 2018, the date of first-time preparation of financial statements according to Ind AS. These accounting principles and measurement principles must be applied retrospectively to the date of transition to Ind AS and for all periods presented within the first Ind AS financial statements.

An explanation of how the transition from previous GAAP to Ind AS has affected the Company’s financial position, financial performance and cash flows is set out in the following tables and notes.

In the Ind AS opening Balance Sheet as at 1 April 2016, the carrying amounts of assets and liabilities from the previous GAAP as at 1 April 2016 are generally recognised and measured according to Ind AS in effect as on 31 March 2018. However for certain individual cases, Ind AS 101 provides for optional exemptions and mandatory exceptions to the general principles of retrospective application of Ind AS. The Company has made use of the following exemptions and exceptions in preparing its Ind AS opening Balance Sheet:

Optional exemptions availed

(i) Property, plant and equipment and intangible assets

Ind AS 101 permits a first-time adopter to elect to continue with the carrying value for all of its property, plant and equipment as recognised in the financial statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition after making necessary adjustments for de-commissioning liabilities. This exemption can also be used for intangible assets covered by Ind AS 38 Intangible Assets. Accordingly, the Company has elected to measure all of its property, plant and equipment and intangible assets at their previous GAAP carrying value.

Mandatory exemptions

(i) Estimates

An entity’s estimates in accordance with Ind ASs at the date of transition to Ind AS shall be consistent with estimates made for the same date in accordance with previous GAAP (after adjustments to reflect any difference in accounting policies), unless there is objective evidence that those estimates were in error.

Ind AS estimates as at 1 April 2016 are consistent with the estimates as at the same date made in conformity with previous GAAP. The Company made estimates for impairment of financial assets based on expected credit loss model in accordance with Ind AS at the date of transition as these were not required under previous GAAP.

(ii) Classification and measurement of financial assets

Ind AS 101 requires an entity to assess classification and measurement of financial assets on the basis of the facts and circumstances that exist at the date of transition to Ind AS.

Reconciliations between previous GAAP and Ind AS

Ind AS 101 requires an entity to reconcile equity, total comprehensive income and cash flows for prior periods. The following tables represent the reconciliations from previous GAAP to Ind AS.

Notes to first-time adoption:

a. Property, plant and equipment

The Company import certain machineries under EPCG benefits in the form of waiver of import duties which is subject to an export obligation. Under previous Indian GAAP, the company capitalises imported asset net of the benefit in lieu of custom duty waived off under the EPCG scheme.

Under Ind AS, the duty benefit availed under Export Promotion Capital Goods (EPCG) scheme on purchase of plant and equipment should be recognised as government grant and the value of property, plant and equipment should be increased by the amount of EPCG benefits netted of on the respective asset, with a corresponding credit to deferred income.

The above adjustment resulted into increase in Property, plant and equipment by Rs 1,034.43 lakh with corresponding increase into deferred income of same amount under other non-current liabilities as at 1 April 2016. As at 31 March 2017, property, plant and equipment has increased by Rs. 245.65 lakh with corresponding increase into deferred income of same amount. Further, during the year ended 31 March 2017, depreciation charged off into statement of profit and loss of Rs 130.45 lakh with the corresponding effect of booking EPCG grant income of same amount.

b. Borrowings

Under previous Indian GAAP, transaction costs incurred in connection with borrowings are amortised upfront and charged to statement of profit and loss for the period. Under Ind AS, transaction costs are included in the initial recognition amount of financial liability and charged to statement of profit and loss using the effective interest method.

The above adjustment resulted into increase in retained earning by Rs 11.30 lakh with corresponding decline in borrowing by Rs. 7.01 lakh as at 1 April 2016. During the year ended 31 March 2017, interest expenses of Rs 3.88 lakh has been charged off into statement of profit and loss with a corresponding increase in borrowing by same amount.

c. Gain on fair value of derivatives

Under Indian GAAP, the Company did not recognised fair value gain/loss on forward contracts on yearly basis. Under Ind AS, the Company is required to recognise fair value gain/loss on forward contracts taken by the Company outstanding as at year end.

As a result, during the year ended 1 April 2016, foreign exchange forward contracts assets of Rs 4.05 lakh and liabilities of Rs 27.01 lakh with corresponding decrease in retained earnings by Rs 22.96 lakh. During the year ended 31 March 2017, foreign exchange forward contracts assets of Rs 22.80 lakh with corresponding decline in statement of profit and profit of Rs 45.76 lakh.

d. Deferred taxes

Previous 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: Income Taxes 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 insignificant amount of deferred tax on new temporary differences and accordingly not recognised.

e. Employee benefits :

Both under Indian GAAP and Ind-AS, the company recognised costs related to its post-employment defined benefit plan on an actuarial basis.

Under Indian GAAP, the entire cost, including actuarial gains and losses are charged to statement of profit and loss. Under Ind-AS, remeasurements (comprising of actuarial gains and losses, the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit liability and the return on plan assets excluding amounts included in net interest on the net defined benefit liability) are recognised in other comprehensive income.

As a result, profit for the year ended 31 March 2017 increased by Rs 14.37 lakh having their tax impact of Rs 4.97 lakh with corresponding decrease in other comprehensive income during the year.

However, there is no impact on total comprehensive income.

f. Lease equalisation reserves

Under previous GAAP, operating lease charges are recognised as an expense in the statement of profit and loss on a straight line basis over the lease term, accordingly lease equalisation reserves is recognised.

However, under Ind AS, lease payments under an operating lease shall be recognised as an expense on a straight line basis over lease term only if the payments to the lessor are not structured to increase in line with expected general inflation to compensate for the lessor’s expected inflationary cost increases. Since, escalation allowed in lease arrangement taken by the Company represents general inflation, lease payments under an operating lease shall not be required to recognise on a straight line basis over lease term.

The effect of the adjustments resulted in reversal in the value of lease equalisation reserves of Rs. 4.97 lakh with corresponding increase in retained earnings on transition date.

During the year ended 31 March 2017, reversal of the value of lease equalisation reserves of Rs 0.98 lakh with corresponding decrease in in rent expenses.

g. Other comprehensive income

Under previous GAAP, the Company has not presented other comprehensive income (OCI) separately. Items that have been reclassified from statement of profit and loss to other comprehensive income includes remeasurement of defined benefit plans. Hence, previous GAAP profit or loss is reconciled to total comprehensive income as per Ind AS.

h. Statement of cash flows

The transition from Indian GAAP to Ind AS has not had a material impact on the statement of cash flows.

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Mar 31, 2017

(b) Terms/rights attached to Equity shares

The Company has only one class of equity shares having a par value of '' 2 per share (March 31, 2016: '' 10 per share). Each holder of Equity shares is entitled to one vote per share. The company declares and pays dividend in Indian rupees ('').

During the year ended March 31, 2017, the amount of per share interim dividend recognized as distributions to equity shareholders is '' 10 (March 31, 2016: '' 15).

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

(d) During the year, the Company has subdivided each equity share of face value of '' 10 each into 5 (Five) Equity Shares of '' 2 each with effect from January 10, 2017 duly approved by the shareholders through Postal Ballot on December 20, 2016.

a) The term loan(s) are secured by equitable mortgage of certain Land & Building situated at Plot No 4, 5A, 52, 53, 54 & 54A DLF Industrial Estate, Phase-I, Delhi- Mathura Road and factory land & building situated at Prithla village, Faridabad & hypothecation of Plant & Machinery & other fixed assets and personal guarantee by some of the directors of the Company.

b) The term loan(s) carries interest ranging between 10% to 12%.

a) Employee Benefits

The Company has classified the various benefits provided to employees as under:-

(i) Defined Contribution Plan

The Company makes contribution towards provident fund, ESI to a defined contribution retirement benefit plan for qualifying employees. The provident fund plan is operated by the Regional Provident Fund Commissioner and the Company is required to contribute a specified percentage of payroll cost to the retirement benefit schemes to fund the benefits. Similarly, the contribution is made in ESI at a specified percentage of payroll cost.

The Company recognized Rs, 17,977,855 (March 31, 2016: Rs, 17,425,668) for provident fund contributions and Rs, 2,062,229 (March 31, 2016: Rs, 2,121,554) for ESI contribution in the Statement of Profit and Loss. The contribution payable to these plans by the Company is at rates specified in the rules of the schemes.

(ii) Defined Benefit Plan

The employee''s gratuity fund scheme managed by Life Insurance Corporation of India is a defined benefit plan. The present value of obligation is determine based on actuarial valuation using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligations. The unfunded gratuity obligation of Directors starting from current financial year is determined based on actuarial valuation using the Projected Unit Credit Method. The obligation for Leave Encashment is recognized in the same manner as Gratuity.

I Name of the Related Parties and description of relationship:

Subsidiary Company Haryana Ispat Private Limited (w.e.f. November 15, 2016)

Enterprise over which KMP exercise Control Sterling Technologies Private Limited

and/or Significant Influence Sterling Automobiles Private Limited

Sterling Mobikes Private Limietd

Jaycee Automobiles Private Limited

Sterling Fincap Private Limited

Prism Global Creative Products Private Limited

Jaycee Premium Cars Private Limited

Noble Cars Private Limited

Key Management Personnel Mr. M. L. Aggarwal - Chairman

Mr. Anil Aggarwal - Managing Director

Mr. Atul Aggarwal - Whole Time Director & CFO

Ms. Vaishali Singh-Company Secretary

Mr. Anish Aggarwal - Relative of Key Management Personnel

Joint Venture Company Sterling Fabory India Private Limited

NOTE 1. DERIVATIVES

a) Derivative instruments outstanding as at balance sheet date: The following contracts are outstanding to hedge the future receipts & payments in the ordinary course of business. These arrangements are designed to address significant exchange exposures and are reviewed/ renewed by the Management on a revolving basis; as required:

Notes:

i) Figures in brackets relate to year ended March 31, 2016.

ii) Share of Contingent liabilities incurred in relation to interests in joint ventures as at March 31, 2017: Rs, 907,036 (March 31, 2016: Rs, 452,247)

iii) Share of Capital Commitments incurred in relation to interests in joint ventures as at March 31, 2017: Rs, Nil (March 31, 2016: Rs, Nil)

* Figures in bracket represents amount for the year ended March 31, 2016

Note 2: In view of the management, the current assets, loans and advances have a value on realization in the ordinary course of business at least equal to the amount at which they are stated in the balance sheet as at March 31, 2017.

Note 3: Since the Company''s business activity falls within a single primary business segment and also there is no significant reportable geographical segment, hence no disclosure have been made as specified in Accounting Standard (AS-17) “Segment Reporting”.

Note 4: The proccess of obtaining balance confirmation and account reconciliation is an ongoing process and accordingly the closing balances of certain trade receivables, trade payables and loans and advances are subject to confirmation as at March 31, 2017.

Note 5: The figures are rounded off to nearest rupee.

Note 6: The previous year figures have been regrouped or rearranged wherever considered necessary.

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Mar 31, 2016

(b) Terms/rights attached to Equity shares

The Company has only one class of equity shares having a par value of '' 10 per share. Each holder of Equity shares is entitled to one vote per share. The company declares and pays dividend in Indian rupees ('').

During the year ended March 31, 2016, the amount of per share interim dividend recognized as distributions to equity shareholders is '' 15 (March 31, 2015: '' 5).

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

a) The term loan(s) are secured by first equitable mortgage of certain Land & Building & hypothecation of Plant & Machinery & other fixed assets and personal guarantee by some of the directors of the Company.

b) The term loan(s) carries interest ranging between 10% to 12%.

c) The repayment profile of the term loan(s) is as set out below:

b) Excise demand amounting to '' 189,015,254 for the period June 2006 to Dec 2008, '' 106,987,422 for the period January 2009 to October 2010, '' 3,990,394 for the period February 2010 to March 2010 and '' 5,326,546 for the period Nov 2010 to January 2011 under Central Excise Act raised due to dispute regarding assessable value with reference to MRP against which appeals were filed before the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), New Delhi. Based on the appeals the department has granted the Stay order No. SO/677-678/2012-EX (DB) dated 23 April 2012 against the demand of '' 189,015,254 for the period June 2006 to Dec 2008 & '' 106,987,422 for the period January 2009 to October 2010. Corresponding to these stay orders, the tribunal (CESTAT) vide section 35-C (1) of the Central Excise Act, 1944 has adjudicated and passed final Order No. A/52747-52748/2015/Ex [DB] dated 05/08/2015 in favor of the Company and accordingly, the demand of '' 189,015,254 for the period June, 2006 to December, 2008 and '' 106,987,422 for the period January, 2009 to October, 2010 stands withdrawn. However, the demand orders for the period February, 2010 to March, 2010 and November, 2010 and January,2011 are still in the dispute till final adjudication.

c) Interest amounting to '' 36, 78,036 on the demands raised by Excise authorities has been calculated by the Company based on the fact mentioned in demand cum show-cause notices pending adjudication.

d) The office of the Commissioner of Central Excise Audit- II, Delhi has vide order No. CE/Depp/ADT-11/CIR-12/GR-27/APR-438/379/2015-16/2418/dated 09-02-2016 issued a demand cum show cause notice for '' 22,226,095 pursuant to non compliance of rule 6(3) of Convert Credit Rules, 2004 for the period February 2011 to September 2015.

a) The working capital facilities include working capital demand loan, packing credit facilities, cash credit & buyers/ suppliers credit. The same are secured by hypothecation of all inventories including those in transit, receivables, book debts on pari passu basis, equitable mortgage of land and building situated at Plot No 52, 53 & 54 DLF Industrial Estate, Phase-I, Delhi- Mathura Road and personal guarantee by some of the directors of the Company. The outstanding balance is repayable on demand and the rate of interest ranges between 9% to 11% per annum.

a) As per Schedule III of the Companies Act, 2013 and notification number GSR 719 (E) dated November 16,

2007 , the amount due as at the yearend due to Micro, small & medium enterprises as defined in Industries (Development and Regulation) Act, 1951 is as given below :

b) This information has been compiled in respect of parties to the extent they could be identified as Micro, Small-scale and Medium Enterprises on the basis of information available with the Management as at March 31, 2016.

a) Capital Commitment:

i) Estimated amount of contracts remaining to be executed on the capital account and not provided for in the account (Net of Capital Advances) '' 49,353,507 (March 31, 2015: '' 123,856,356).

ii) The Company in previous year had paid amounts to Senior Town Planner, Faridabad Circle, Faridabad, for the “change in land use” of its part of the land situated at its Prattle unit. As per the agreed terms, there will be certain external development charges which are payable on a future date. However, the quantum of such future liability is not quantified in the said letter.

a) Employee Benefits

The Company has classified the various benefits provided to employees as under:-

(i) Defined Contribution Plan

The Company makes contribution towards provident fund, ESI to a defined contribution retirement benefit plan for qualifying employees. The provident fund plan is operated by the Regional Provident Fund Commissioner and the Company is required to contribute a specified percentage of payroll cost to the retirement benefit schemes to fund the benefits. Similarly, the contribution is made in ESI at a specified percentage of payroll cost.

The Company recognized '' 17,425,668 (March 31, 2015: '' 15,224,573) for provident fund contributions and '' 2,121,554 (March 31, 2015: '' 2,729,544) for ESI contribution in the Statement of Profit and Loss. The contribution payable to these plans by the Company is at rates specified in the rules of the schemes.

(ii) Defined Benefit Plan

The employee''s gratuity fund scheme managed by Life Insurance Corporation of India is a defined benefit plan. The present value of obligation is determine based on actuarial valuation using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligations. The obligation for Leave Encashment is recognized in the same manner as Gratuity.

Note: The Estimate of rate of escalation in Salary considered in actuarial valuation, takes into account inflation, seniority, promotion and other relevant factors on long term basis including supply and demand in the Employment market.

Note 1: Assets taken on operating leases

a) The details of Leases in compliance of AS 19 are as under:

i) The Company has taken Factory Premises on non-cancellable operating lease from Haryana I spat Private Limited. Agreement of Lease was renewed on 01.01.2012 and is valid till 31.12.2016. Lease rental (including transfer to lease equalization reserve) amounting to '' 6,630,758 (March 31, 2015: '' 6,630,758) has been debited to Statement of Profit and Loss. Future minimum lease rentals as on 31 March 2016 are as under:

ii) The Company has taken Nitrogen Plant on non-cancellable operating lease from Air Liquid North India Private Limited Lease Agreement is valid till 14.02.2017. Lease rental amounting to '' 240,000 (March 31, 2015: '' 240,000) has been debited to Statement of Profit and Loss. Future minimum lease rentals as on 31 March 2016 are as under:

iii) The Company has taken furnished office space on operating cancelable lease. Lease Agreement was valid till 31.10.2017. Lease rental amounting to '' 90,000 (March 31, 2015: '' 143,340) has been debited to Statement of Profit and Loss.

iv) The Company has taken furnished office space on operating cancelable lease. Lease Agreement is valid till 31.03.2016. Lease rental amounting to '' 72,000 (March 31, 2015: '' 72,000) has been debited to Statement of Profit and Loss.

v) The Company has taken two Tricotect Equipments on non-cancellable operating lease from Atotech India Private Limited. Lease Agreements are valid till 28.02.2018. Lease rental amounting to '' 110,000 (March 31, 2015: '' 60,000) has been debited to Statement of Profit and Loss. Future minimum lease rentals as on 31 March 2016 are as under:

v) The provision for contribution to Gratuity, Leave Encashment on retirement and other defined benefits which are made on actuarial valuation on an overall Company basis are not included in the remuneration to Key Managerial Personnel disclosed above.

NOTE 2. DERIVATIVES

a) Derivative instruments outstanding as at balance sheet date: The following contracts are outstanding to hedge the future receipts & payments in the ordinary course of business. These arrangements are designed to address significant exchange exposures and are reviewed/ renewed by the Management on a revolving basis; as required:

Notes:

i) Figures in brackets relate to year ended March 31, 2015.

ii) Share of Contingent liabilities incurred in relation to interests in joint ventures as at March 31, 2016: '' Nil (March 31, 2015: '' Nil)

iii) Share of Capital Commitments incurred in relation to interests in joint ventures as at March 31, 2016: '' Nil (March 31, 2015: '' Nil)

NOTE 31: CSR Expenditure CSR Expenditure

(a) Gross amount required to be spent by the Company during the year (i.e. 2% of Average Net profits u/s 198 of Companies Act, 2013 of last three years):

(b) Amount spent during the year:

Note 3

In view of the management, the current assets, loans and advances have a value on realization in the ordinary course of business at least equal to the amount at which they are stated in the balance sheet as at March 31, 2016.

Note 4

Since the Company''s business activity falls within a single primary business segment and also there is no significant reportable geographical segment, hence no disclosure has been made as specified in Accounting Standard (AS-17) “Segment Reporting”.

Note 5

The process of obtaining balance confirmation and account reconciliation is an ongoing process and accordingly the closing balances of certain trade receivables, trade payables and loans and advances are subject to confirmation as at March 31, 2016.

Note 6

The figures are rounded off to nearest rupee.

Note 7

The previous year figures have been regrouped or rearranged wherever considered necessary.

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Mar 31, 2015

1. Sterling Tools Limited (the company) is a public limited company incorporated in the year 1979 under the provisions of the Companies Act, 1956. Its shares are listed on Bombay Stock Exchange and National Stock Exchange in India. The Company is engaged in the manufacturing and marketing of high tensile cold forged fasteners. It is one of the progressive Original Equipment Manufacturer (OEM) suppliers in India with a client base that spans automotive companies in India, Europe and USA.

2. Terms/rights attached to Equity shares

The company has only one class of equity shares having a par value of Rs.10 per share. Each holder of Equity shares is entitled to one vote per share. The company declares and pays interim dividend in Indian rupees.

During the year ended March 31,2015, the amount of per share dividend recognized as distributions to equity shareholders is Rs.5 (March 31,2014: Rs.5).

In the event of liquidation of the company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

3. CONTINGENT LIABILITIES (Amount in Rs.)

As at As at March 31, 2015 March 31, 2014

S.No. Particulars

i) Disputed Liability under 305,319,675 348,815,314 Central Excise Act*

ii) Interest on disputed liability 132,201,696 112,355,917 under Central Excise Act**

iiI) Letter of Credit 209,814,723 5,586,649

iv) Bank Guarantee 1,535,902 1,535,902

V) Guarantee towards repayment of - 77,539 EMI of car loans taken by the employees from MUL

Vi) EPCG-Duty in relation to Export 34 477 000 - Obligation (Amount of export sales obligation Rs.284,185,317)

Disputed Liability for AY 2009-10 98,594 - vii) under Haryana Value Added Tax Act, 2003 on account Sale of Capital Good (Cars). The same is pending before The Hon''ble Haryana Tax Tribunal at Chandigarh.

Disputed Liability for A.Y 2012-13 46,736 - under Income tax Act,1961 on viii) account of disallowance u/s 14A of Income tax Act, 1961. The same is pending before CIT (Appeals), VIII, New Delhi

Rectification filed u/s 154 for 9,532,772 - assessment year 2012-13 for ix) rectification of asseessment order dt. 15.03.2015 u/s 143(3) of Income Tax Act,1961.

* Excise demand amounting to Rs.189,015,254 for the period June 2006 to Dec 2008,''106,987,422 for the period January 2009 to October 2010, Rs.3,990,394 for the period February 2010 to March 2010, Rs.5,326,546 for the period Nov 2010 to January 2011 under Central Excise Act arised due to dispute regarding assessable value with reference to MRP against which appeals were filed before the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), New Delhi. Based on the appeals the department has granted the Stay order(No. SO/677-678/2012-EX (DB)) dated 23 April 2012 against the demand of Rs.189,015,254 for the period June 2006 to Dec 2008, Rs.106,987,422 for the period January 2009 to October 2010 and Stay Order (No. 53711-53714/2014- EX (DB)) dated 11 November 2014 of Rs.4,658,470 against the demand of Rs.3,990,394 for the period February 2010-March 2010 and Rs.5,326,546 for the period November 2010-January 2011.

Based on the decisions of the Appellate Authorities and the interpretations of other relevant provisions, the company has been legally advised that the demands raised under the above said Acts are likely to be either deleted or substantially reduced and accordingly no provision has been made.

**Interest amounting to Rs.132,201,696 on the demands raised by Excise authorities has been calculated by the Company based on the fact mentioned in demand cum show-cause notices.

4. Capital Commitment:

a) Estimated amount of contracts remaining to be executed on the capital account and not provided for in the account Rs.123,856,356(March 31,2014: Rs.73,505,104).

b) The Company in previous year had paid amounts to Senior Town Planner, Faridabad Circle, Faridabad, for the "change in land use" of its part of the land situated at its Prithla unit. As per the agreed terms, there will be certain external development charges which are payable at future period. However, the quantum of such future liability is not quantified in the said letter.

a) Employee Benefits

The Company has classified the various benefits provided to employees as under:-

5. Defined Contribution Plan

The Company makes contribution towards provident fund to a defined contribution retirement benefit plan for qualifying employees. The provident fund plan is operated by the Regional Provident Fund Commissioner and the Company is required to contribute a specified percentage of payroll cost to the retirement benefit schemes to fund the benefits.

The Company recognized Rs.15,224,573/- (March 31, 2014: Rs.12,809,791/-) for provident fund contributions and Rs.2,729,544 /- (March 31,2014: Rs.3,021,359 /-) for ESI contribution in the statement of profit and loss . The contribution payable to these plans by the Company is at rates specified in the rules of the schemes.

6. Defined Benefit Plan

The employee''s gratuity fund scheme managed by Life Insurance Corporation of India is a defined benefit plan. The present value of obligation is determine based on actuarial valuation using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligations. The obligation for leave encashment is recognized in the same manner as gratuity.

7. Name of the Related Parties and description of relationship:

Significant influence of KMP''s

Haryana Ispat Pvt. Ltd. Sterling Technologies Pvt Ltd. Sterling Automobiles Pvt. Ltd. Sterling Mobikes Pvt.Ltd. Jaycee AutomobilesPvt. Ltd.

Key Management Personnel

Mr. M. L. Aggarwal - Chairman Mr. Anil Aggarwal - Managing Director Mr. Atl Aggarwal - Whole Time Director & CFO Ms. Vaishali Singh-Company Secretary Mr. Anish Aggarwal - Relative of Key Management Personnel

8. As per Note No.7 of Part "C" of the Schedule II to the Companies Act, 2013 the carrying amount of the assets as at April 1,2014 has been depreciated as follows:

a) Carrying value of asset has been depreciated over the remaining useful life of assets and recognized in the Statement of Profit & Loss.

b) In case where the remaining useful life of an asset is nil the carrying amount of the assets after retaining the residual value has been recognized in the opening balance of retained earnings.

The Company has wef 1st April 2014, computed depreciation in accordance with the useful life of the Fixed Assets as per schedule II of the Companies Act,2013. Consequently Depreciation charged for the year is higher by Rs.12,614,054 and carrying value of the assets amounting to Rs.4,833,077 (Net of Deferred Tax Rs.2,488,657) after retaining the residual value,whose remaining useful life is nil has been adjusted from the opening balance of Retained Earnings.

9. In view of the management, the current assets, loans and advances have a value on realization in the ordinary course of business at least equal to the amount at which they are stated in the balance sheet as at 31.03.2015

10. Since the Company''s business activity falls within a single primary business segment and also there is no significant reportable geographical segment, hence no disclosure have been made as specified in Accounting Standard (AS-17) "Segment Reporting"

11. The closing balances of debtors, creditors and loans and advances are subject to confirmation.

12. The figures are rounded off to nearest rupees.

14. Previous year figures have been regrouped/ rearranged wherever considered necessary.

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Mar 31, 2014

NOTE 1: CORPORATE INFORMATION

Sterling Tools Limited (the company) is a public limited company incorporated in the year 1979 under the provisions of the Companies Act, 1956. Its shares are listed on Bombay Stock Exchange and National Stock Exchange in India. The Company is engaged in the manufacturing and marketing of high tensile cold forged fasteners. It is one of the progressive Original Equipment Manufacturer (OEM) suppliers in India with a client base that spans automotive companies in India, Europe and USA.

(Amount in Rs.) CONTINGENT LIABILITIES

S. No. Particulars For the year ended For the year ended March 31, 2014 March 31, 2013

i) Disputed Liability under Central Excise Act* (Including interest) 461,171,231 405,293,695

ii) Letter of Credit (Net of Margin) 5,586,649 49,829,637

iii) Bank Guarantee (Net of Margin) 1,535,902 1,934,106

iv) Guarantee towards repayment of EMI of car loans taken by the employees from MUL 77,539 297,847

v) EPCG –Export Obligation - 60,854,594

*Excise demand amounting to Rs. 189,015,254 for the period June 2006 to Dec 2008 ,Rs. 106,987,422 for the period January 2009 to October 2010, Rs. 3,990,394 for the period February 2010 to March 2010, Rs. 5,326,546 for the period Nov 2010 to January 2011 under Central Excise Act arises due to dispute regarding assessable value with reference to MRP against which appeals were filed before the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), New Delhi. Based on the appeals the department has granted the Stay order(No. SO/677- 678/2012-EX (DB)) dated 23 April 2012 against the demand of Rs. 189,015,254 for the period June 2006 to Dec 2008 ,Rs. 106,987,422 for the period January 2009 to October 2010. During the year, one demand order for Rs. 544,764 including penalty for the period October 2004 to November 2004 was received by the company against which appeals were filed before Commissioner(Appeals),custom & central excise ,Delhi-IV, Faridabad. The said demand was raised due to wrong availment of CENVAT credit w.r.t duty paid on certain inputs viz. Bright Bars which itself are non-excisable. Based on the decisions of the Appellate Authorities and the interpretations of other relevant provisions, the company has been legally advised that the demand is likely to be either deleted or substantially reduced and accordingly no provision has been made.

a) Working Capital Facilities include working capital demand loan, packing credit facilities, cash credits & buyers/ suppliers credit for raw material . The same are secured by hypothecation of all inventories including in transit, receivables, book debts, plant and machinery and other fixed assets, equitable mortgage of certain land and building,and personal guarantee by some of the directors of the Company. The oustanding balance is repayable on demand. Cash Credit carries interest ranging from 10% to 11%.

b) Buyers credit for capital goods was secured by first mortgage of certain Land & Building & hypothecation of Plant & Machinery & other fixed assets and personal guarantee by some of the directors of the company.

(a) Employee Benefits

The Company has classified the various benefits provided to employees as under:-

(i) Defined Contribution Plan

The Company makes contribution towards provident fund to a defined contribution retirement benefit plan for qualifying employees. The provident fund plan is operated by the Regional Provident Fund Commissioner and the Company is required to contribute a specified percentage of payroll cost to the retirement benefit schemes to fund the benefits.

The Company recognized Rs. 12,809,791/- (March 31, 2013: Rs. 12,411,691/-) for provident fund contributions and Rs. 3,021,359 /- (March 31, 2013: Rs. 2,880,438/-) for ESI contribution in the statement of profit and loss. The contribution payable to these plans by the Company is at rates specified in the rules of the schemes.

(ii) Defined Benefit Plan

The employee''s gratuity fund scheme managed by Life Insurance Corporation of India is a defined benefit plan. The present value of obligation is determine based on actuarial valuation using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligations. The obligation for leave encashment is recognized in the same manner as gratuity.

NOTE 2: RELATED PARTY DISCLOSURES

Name of the Related Parties and description of relationship:

Enterprises over which Key Management Personnel has significant influence

Haryana Ispat Pvt. Ltd. Sterling Technologies Pvt Ltd. Sterling Automobiles Pvt. Ltd. Sterling Mobikes Pvt.Ltd. Jaycee Automobiles Pvt. Ltd.

Key Management Personnel & their relatives

Mr. M. L. Aggarwal - Chairman

Mr. Anil Aggarwal – Managing Director

Mr. Atul Aggarwal – Whole Time Director

Mr. Anish Aggarwal – Relative of Key Management Personnel

Joint Venture Company Sterling Fabory India Pvt. Ltd

i.) Figures in brackets( ) relate to previous year.

ii ) Share of Contingent liabilities incurred in relation to interests in joint ventures as at March 31, 2014: Rs. Nil(March 31, 2013 : Rs. Nil)

iii) Share of Capital Commitments incurred in relation to interests in joint ventures as at March 31, 2014: Rs. Nil(March 31, 2013 : Rs. Nil)

Note 3

In view of the management, the current assets, loans and advances have a value on realization in the ordinary course of business at least equal to the amount at which they are stated in the balance sheet as at 31.03.2014

Note 4

Since the Company''s business activity falls within a single primary business segment and also there is no significant reportable geographical segment, hence no disclosure have been made as specified in Accounting Standard (AS-17) "Segment Reporting"

Note 5

The closing balances of debtors, creditors and loans and advances are subject to confirmation.

Note 6

The figures are rounded off to nearest rupees.

Note 7

Previous year figures have been regrouped/ rearranged wherever considered necessary.

---

Mar 31, 2013

NOTE 1: CORPORATE INFORMATION

Sterling Tools Limited (the company) is a public limited company incorporated in the year 1979 under the provisions of the Companies Act, 1956. Its shares are listed on Bombay Stock Exchange and National Stock Exchange in India. The Company is engaged in the manufacturing and marketing of high tensile cold forged fasteners. It is one of the progressive Original Equipment Manufacturer (OEM) suppliers in India with a client base that spans automotive companies in India, Europe and USA.

Note 2 In view of the management, the current assets, loans and advances have a value on realization in the ordinary course of business at least equal to the amount at which they are stated in the balance sheet as at 31.03.2013."

Note 3 Since the Company''s business activity falls within a single primary business segment and also there is no significant reportable geographical segment, hence no disclosure have been made as specified in Accounting Standard (AS-17) "Segment Reporting"

Note 4 The closing balances of debtors, creditors and loans and advances are subject to confirmation.

Note 5 Previous year figures have been regrouped/ rearranged wherever considered necessary.

---

Mar 31, 2012

NOTE 1: CORPORATE INFORMATION

Sterling Tools Limited (the company) is a public limited company incorporated in the year 1979 under the provisions of the Companies Act, 1956. Its shares are listed on two stock exchanges in India. The Company is engaged in the manufacturing and marketing of high tensile cold forged fasteners. It is one of the progressive Original Equipment Manufacturer (OEM) suppliers in India with a client base that spans automotive companies in India, Europe and USA.

(a) Terms/rights attached to Equity shares

The company has only one class of equity shares having a par value of Rs. 10 per share. Each holder of Equity shares is entitled to one vote per share. The company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.In the event of liquidation of the company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

NOTE 2 : LONG TERM BORROWINGS Contd.

a) Term loan are secured by first mortgage of certain Land & Building, Plant & Machinery & other fixed assets and hypothication of Movable Assets, and personal guarantee by some of the directors of the company. The vehicle loans are secured by hypothecation of respective vehicles.

b) Working Capital Term Loan is secured by hypothication of Stock in Trade, Receivables, Mortgage of certain Land and Building, plant and machinery and other fixed assets and personal guarantee by some of the directors of the Company.

a) Working Capital Facilities include working capital demand loan and packing credit facilities. The same are secured by hypothication of stock in trade, receivables, mortgage of certain land and building, plant and machinery and other fixed assets and personal guarantee by some of the directors of the Company. The oustanding balance is repayable on demand and carries interest ranging between 10% to 12.5%.

(a) Employee Benefits

The Company has classified the various benefits provided to employees as under:-

(i) Defined Contribution Plan

The Company makes contribution towards provident fund to a defined contribution retirement benefit plan for qualifying employees. The provident fund plan is operated by the Regional Provident Fund Commissioner and the Company is required to contribute a specified percentage of payroll cost to the retirement benefit schemes to fund the benefits.

The Company recognized Rs 12,348,714/- (March 31, 2011: Rs. 9,260,602/-) for provident fund contributions and Rs 3,558,133 /- (March 31, 2011: 3,281,809/-) for ESI contribution in the profit and loss account. The contribution payable to these plans by the Company is at rates specified in the rules of the schemes.

(ii) Defined Benefit Plan

The employee''s gratuity fund scheme managed by Life Insurance Corporation of India is a defined benefit plan. The present value of obligation is determine based on actuarial valuation using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligations. The obligation for leave encashment is recognized in the same manner as gratuity.

b) The Company has taken office space on operating cancelable lease. Lease Agreement is valid for the further period of 0.9 years as on March 31,2012. Lease rental amounting to Rs. 120,000 (March 31,2011:120,000) has been debited to Profit and Loss Account.

d) The Company has taken Gas Bullets on non-cancelable operating lease. Lease Agreement is valid for the further period of 4.5 years as on 31 March 2011 however same was terminated during the year with mutual consent of Party. Lease rental amounting to Rs. Nil/- (March 31,2011: Rs. 133,344) has been debited to Profit and Loss Account. .

e) The Company has taken a godown on cancelable operating lease. Lease Agreement is valid up to 31.05.2011. Lease rental amounting to Rs.50,000/- (March 31,2011: Rs. 292,800/-) has been debited to Profit and Loss Account.

f) The Company has taken furnished office space on operating cancelable lease. Lease Agreement is valid for the further period of 1 year as on 31 March 2012. Lease rental amounting to Rs.201,600 (March 31,2011:192,000/-) has been debited to Profit and Loss Account.

(Amount in Rupees)

As At As At

31 March, 2012 31 March, 2011

NOTE 3: CONTINGENT LIABILITIES

S.No. Particulars

I) Bills Discounted 8,549,731.00 74,008,336.00

ii) Disputed Liability under Central Excise Act* 296,338,501.00 299,863,715.00

iii) Letter of Credit (Net of Margin) 77,490,416.00 132,555,964.00

iv) Bank Guarantee (Net of Margin) 3,089,052.00 -

v)Guarantee towards repayment of EMI of car loans taken by the employees from MUL 581,150.00 1,262,625.00

vi) EPCG-Export Obligation 388,178,865.00 153,407,858.00

`Excise demand amounting to Rs. 189,015,254 for the period June 2006 to Dec 2008 and Rs. 106,987,422 for the period January 2009 to October 2010 under Central Excise Act for dispute regarding assessable value with reference to MRP which is pending before the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), New Delhi. However, Company is contesting the Demands, and therefore took an Stay order (No. SO/677-678/2Q12-EX (DB)) dated 23 April 2012 against the appeal and demand of Excise Duty.

Note 4 In view of the management, the current assets, loans and advances have a value on realization in the ordinary course of business at least equal to the amount at which they are stated in the balance sheet as at 31.03.2012.

Note 5 Since the Company''s business activity falls within a single primary business segment and also there is no significant reportable geographical segment, hence no disclosure have been made as specified in Accounting Standard (AS-17) "Segment Reporting".

Note 6 The closing balances of debtors, creditors and loans and advances are subject to confirmation.

Note 7 Till the year ended 31 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 31 March, 2012, the revised schedule VI notified under the Companies Act, 1956, has become applicable to the company. The company has reclassified, regrouped or recasted previous year figures to confirm to this year''s classification.

---

Mar 31, 2011

A. Estimated amount of contracts remaining to be executed on the capital account and not provided for in the account Rs.924,761 (Previous year Rs. 4,827,913).

b. Contingent Liabilities not provided for:

(Amount in Rs.) As At As At 31st March, 2011 31st March, 2010

Bills Discounted 74,008,336 8,715,781

Disputed Liability under Central Excise Act * 299,863,715 24,459,305

Letter of Credit (Net of Margin) 132,555,964 81,649,792

* Against which the Company has filed the appeal.

The Company has provided a guarantee towards repayment of EMI of car loans taken by the employees from MUL for which deductions are made from the salaries of respective employees. The outstanding loan amount at the year end is Rs1,262,625 /- (Previous Year Rs 22,54,593/-).

This information has been compiled in respect of parties to the extent they could be identified as Micro, Small-scale and Medium Enterprises on the basis of information available.

h. Related Party Disclosure - (Accounting Standard -18)

Name of the Related Parties and description of relationship:

I. Associates Sterling Fincap Pvt Ltd.

(Formerly Precision Wire Products Pvt Ltd )

Haryana Ispat Pvt. Ltd.

Sterling Technologies Pvt Ltd.

Prism Global Creative Products Pvt. Ltd.

Sterling Automobiles Pvt. Ltd.

Sterling Mobike Pvt.Ltd.

(Formerly Supreme MetalForms Pvt. Ltd).

Jaycee Automobiles Pvt. Ltd.

Sterling Metal Fabriks Pvt Ltd.

Anuradha Mittal Benefit Trust

M. L. Aggarwal - HUF

Anil Aggarwal - HUF

Atul Aggarwal - HUF

II. Key Management Personnel Mr. M. L. Aggarwal - Chairman

Mr. Anil Aggarwal - Managing Director

Mr. Atul Aggarwal - Whole Time Director

III Joint Venture Company Sterling Fabory India Pvt. Ltd



c) The Company has taken a godown on cancelable operating lease. Lease Agreement is valid up to 31.03.2011. Lease rental amounting to Rs.292,800 /- (Previous Year Rs. 292,800/-) has been debited to Profit and Loss Account.

d) The Company has taken furnished office space on operating cancelable lease. Lease Agreement is valid for the further period of 2 years. Lease rental amounting to Rs.192,000 (Previous Year 16,000/-) has been debited to Profit and Loss Account.

e) The Company has taken office space on operating cancelable lease. Lease Agreement is valid for the further period of 1.9 years as on 31.03.2011. Lease rental amounting to Rs.130,000 (Previous Year NIL) has been debited to Profit and Loss Account.

m. Employee Benefits

(i) Defined Contribution Plan

The Company makes contribution towards provident fund to a defined contribution retirement benefit plan for qualifying employees. The provident fund plan is operated by the Regional Provident Fund Commissioner and the Company is required to contribute a specified percentage of payroll cost to the retirement benefit schemes to fund the benefits.

The Company recognized Rs 9,260,602 (Previous Year: Rs. 8,484,144) for provident fund contributions and Rs 3,281,809/- ( Previous year 1,829,433/-) for ESI contribution in the profit and loss account. The contribution payable to these plans by the Company is at rates specified in the rules of the schemes.

(ii) Defined Benefit Plan

The employees gratuity fund scheme managed by Life Insurance Corporation of India is a defined benefit plan. The present value of obligation is determine based on actuarial valuation using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligations. The obligation for leave encashment is recognized in the same manner as gratuity.

n. As the Accounting Standard 30, 31 & 32 (i) Financial Instruments: Recognitions & Measurement (ii) Financial Instruments: Presentation and (iii) Financial Instrument: Disclosures are recommendatory in nature, the details of required disclosures are as under:

p. In view of the management, the current assets, loans and advances have a value on realization in the ordinary course of business at least equal to the amount at which they are stated in the balance sheet as at 31.03.2011.

q The closing balances of debtors, creditors and loans and advances are subject to confirmation.

r. Previous year figures have been rearranged, regrouped and recast wherever considered necessary.

s. All financial figures have been rounded off to the nearest rupee.

---

Mar 31, 2010

A. Estimated amount of contracts remaining to be executed on the capital account and not provided for in the account Rs. 4,827,913/- (Previous year Rs. 9,470,764/-)

b. Contingent Liabilities:

(Amount in Rs.)

As At As At

31st March, 2010 31st March, 2009

Bills Discounted 8,715,781 5,205,323

Disputed Liability under Central Excise Act * 24,459,305 24,464,955

Letter of Credit (Net of Margin) 81,649,792 62,437,575

* Against which the Company has filed the appeal.

The Company has provided a guarantee towards repayment of EMI of car loans taken by the employees from MUL for which deductions are made from the salaries of respective employees. The outstanding loan amount at the year end is Rs 22,54,593/- (Previous Year Rs 3,022,023/-).

b. Related Party Disclosure - (Accounting Standard -18)

Name of the Related Parties and description of relationship:

I. Associates

Sterling Fincap Pvt Ltd.

(Formerly PrecisionWire Products Pvt Ltd )

Haryana Ispat Pvt. Ltd.

Sterling Technologies Pvt Ltd.

Prism Global Creative Products Pvt. Ltd.

Sterling Automobiles Pvt. Ltd.

Sterling Mobike Pvt.Ltd.

(Formerly Supreme MetalForms Pvt. Ltd).

Jaycee Automobiles Pvt. Ltd.

Sterling Metal Fabriks Pvt Ltd.

Anuradha Mittal Benefit Trust

M. L. Aggarwal – HUF

Anil Aggarwal – HUF

Atul Aggarwal - HUF

II. Key Management Personnel

Mr. M. L. Aggarwal - Chairman

Mr. Anil Aggarwal – Managing Director

Mr. Atul Aggarwal – Whole Time Director

III Joint Venture

Sterling Fabory India Pvt. Ltd

IV. Leases

The details of Leases in compliance of AS 19 are as under: i) Assets taken on Operating leases:

c) The Company has taken a godown on cancelable operating lease. Lease Agreement is valid for the further period of 1 years. Lease rental amounting to Rs. 292,800/- (Previous Year Rs. 278,400/-) has been debited to Profit and Loss Account.

d) The Company had taken furnished office space on operating cancelable lease. Lease Agreement was valid for the further period of 4 years as on 31.03.2009. This lease agreement has been cancelled w.e.f July 2009. Lease rental amounting to Rs. 69,000/- ( Previous Year Rs.276,000/-) has been debited to Profit and Loss Account.

e) The Company has taken furnished office space on operating cancelable lease. Lease Agreement is valid for the further period of 3 years. Lease rental amounting to Rs. 16,000/- (Previous Year Nil/-) has been debited to Profit and Loss Account.

f) The Company had taken office space on operating lease for the period from July, 2009 to March, 2010. Lease rental amounting to Rs. 44,032/- (Previous Year Nil) has been debited to Profit & Loss Account.

g. Employee Benefits

(i) Defined Contribution Plan

The Company makes contribution towards provident fund to a defined contribution retirement benefit plan for qualifying employees. The provident fund plan is operated by the Regional Provident Fund Commissioner and the Company is required to contribute a specified percentage of payroll cost to the retirement benefit schemes to fund the benefits.

The Company recognized Rs.8,484,144 (Previous Year: Rs. 7,793,431/-) for provident fund contributions and Rs 1,829,433/- ( Previous year 1,670,121/-) for ESI contribution in the profit and loss account. The contribution payable to these plans by the Company is at rates specified in the rules of the schemes.

(ii) Defined Benefit Plan

The employees gratuity fund scheme managed by Life Insurance Corporation of India is a defined benefit plan. The present value of obligation is determine based on actuarial valuation using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligations. The obligation for leave encashment is recognized in the same manner as gratuity.

h. Disclosures in respect of Joint Venture

During the year the company has entered into an agreement with Borstlap Masters in fasteners group B.V (Fabory) to form a joint venture company in India which will be engaged in the business of sourcing, marketing and supply chain management of high quality standard and non- standards fasteners and providing value added services. As per the terms of agreement a joint venture company “Sterling Fabory India (P) Limited” was incorporated on 6th March 2010. The Preliminary & Pre incorporation and other expenses of Rs. 650,439 incurred has been treated as Share Application Money and is inculded under the Schedule Loans & Advances.

i. In view of the management, the current assets, loans and advances have a value on realization in the ordinary course of business at least equal to the amount at which they are stated in the balance sheet as at 31.03.2010.

j. The closing balances of debtors, creditors and loans and advances are subject to confirmation.

q. Previous year figures have been rearranged, regrouped and recast wherever considered necessary.

r. All financial figures have been rounded off to the nearest rupee.

---

Mar 31, 2009

1. Notes to Account

a. Estimated amount of contracts remaining to be executed on the capital account and not provided for in the account is Rs. 9,470,764/- (Previous year Rs. 31,636,601/-)

b. Contingent liabilities :

(Amount in Rs.)

As At As At 31st March, 2009 31st March, 2008

Bills Discounted 5,205,323 7,226,406

Disputed Liability under Central Excise Act * 24,464,955 15,923,291

Letter of Credit (Net of Margin) 62,437,575 116,383,630

* Against which the Company has filed the appeal.

The Company has provided a guarantee towards repayment of EMI of car loans taken by the employees from MUL for which deductions are made from the salaries of respective employees. The outstanding loan amount at the year end is Rs 3,022,023/- (RY. Rs 4,115,284/-)

h. Related Party Disclosure - (Accounting Standard -18)

Name of the Related Parties and description of relationship:

I. Associates Sterling Fincap Pvt Ltd.

(Formerly Precision Wire Products Pvt Ltd ) Haryana Ispat Pvt. Ltd. Sterling Technologies Pvt Ltd. Prism Global Creative Products Pvt. Ltd. Sterling Automobiles Pvt. Ltd. Supreme Metalforms Pvt. Ltd. Jaycee Automobiles Pvt. Ltd. Sterling Metal Fabriks Pvt Ltd. Anuradha Mittal Benefit Trust M. L. Aggarwal - HUF Anil Aggarwal - HUF Atul Aggarwal - HUF II. Key Management Personnel Mr. M. L. Aggarwal - Chairman

Mr. Anil Aggarwal - Managing Director Mr. Atul Aggarwal - Whole Time Director

c) The Company has taken a godown on cancellable operating lease. Lease Agreement is valid for the further period of2 years. Lease rental amounting to Rs. 278,400/- (Previous Year Rs. 240,000/-) has been debited to Profit and Loss Account.

d) The Company has taken furnished office space on operating cancellable lease. Lease Agreement

is valid for the further period of 4 years. Lease rental amounting to Rs. 276,000/- (Previous Year Rs.262,560/-) has1 been debited to Profit and Loss Account.

m Retirement Benefits

(i) Defined Contribution Plan

The Company makes contribution towards provident fund to a defined contribution retirement benefit plan for qualifying employees. The provident fund plan is operated by the Regional Provident Fund Commissioner and the Company is required to contribute a specified percentage of payroll cost to the retirement benefit schemes to fund the benefits.

The Company recognized Rs. 7,793,431/- (Previous Year: Rs. 7,921,763/-) for provident fund contributions in the profit and loss account. The contribution payable to these plans by the Company is at rates specified in the rules of the schemes.

(ii) Defined Benefit Plan

The employees gratuity fund scheme managed by Life Insurance Corporation of India is a defined benefit plan. The present value of obligation is determine based on actuarial valuation using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligations. The obligation for leave encashment is recognized in the same manner as gratuity.

p) In view of the management, the current assets, loans and advances have a value on realization in the ordinary course of business at least equal to the amount at which they are stated in the balance sheet as at 31.03.2(309.

q) The closing balances of debtors, creditors and loans and advances are subject to confirmation.

r) Previous year figures have been rearranged, regrouped and recast wherever considered necessary.

S) All financial figures have bee!n rounded off to the nearest rupee.

---

Mar 31, 2008

A. Estimated amount of contracts remaining to be executed on the capital account and not provided for in the account Rs. 31,636,601 (Previous year Rs. 82,167,529)

b. Contingent liabilities :

As At As At 31st March, 2008 31st March 2007

Bills Discounted 7,226,406 34,605,501

Disputed Liability under Central Excise Act 15,923,291 1,216,717

Letter of Credit (Net of Margin) 116,383,630 73,900,000

* Against which the company has filed the appeal.

c. Pursuant to amendments to schedule VI to Companies Act, 1956 vide notification number GSR 719 (E) dated November 16, 2007, the amount due as of March 31, 2008 due to micro, small & medium enterprises as defined in Industries (Development and Regulation) Act, 1951 is Rs. 12,140,937.36 (Previous year Rs. 54,669 due to Small Scale & Ancillary Industries undertakings). This information has been compiled in respect of parties to the extent they could be identified as Micro, Small-scale and Medium Enterprises on the basis of information available.

d. The company is in the business of manufacture of high tensile fasteners and as such it is the only reportable segment as per the Accounting Standard 17 on Segment Reporting issued by the ICAI. The geographical segment is not relevant as export turnover is not significant in respect to total turnover.

e. Retirement Benefits

During the year, the Company has adopted Accounting Standard 15 (revised 2005) Employee Benefits. Accordingly, the transitional provision aggregating Rs. 19,896 (Net of deferred tax Rs. 5,344) has been shown as an adjustment from revenue reserves. The Company has classified the various benefits provided to employees as under:-

(i) Defined Contribution Plan

The company makes contribution towards provident fund to a defined contribution retirement benefit plan for qualifying employees. The provident fund plan is operated by the Regional Provident fund commissioner and the company is required to contribute a specified percentage of payroll cost to the retirement benefit schemes to fund the benefits.

The company recognized Rs. 7,921,763/- (Previous Year: Rs. 6,945,298/-) for provident fund contributions in the profit and loss account. The contribution payable to these plans by the company are at rates specified in the rules of the schemes.

(ii) Defined Benefit Plan

The employees gratuity fund scheme managed by Life Insurance Corporation of India is a defined benefit plan. The present value of obligation is determine based on actuarial valuation using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligations. The obligation for leave encashment is recognized in the same manner as gratuity.

---

Mar 31, 2007

A. Estimated amount of contracts remaining to be executed on the capital account and not provided for in the accounts Rs. 82,167,529/- (Previous year Rs. 57,614,166/-)

b. Contingent liabilities :

Current year Previous year Rs. Rs.

Bills Discounted 34,605,501 60,929,325 Disputed Excise Duty Liability 1,216,717 against which the company has filed the appeal c. Remuneration to the auditors Audit fee 220,000 220,000 Tax Audit Fee 30,000 30,000 Other Matters 19,500 - Service Tax 32,987 30,600 Out of Pocket expenses 65,224 60,071

c. Remuneration to the Managing Director and Whole-Time Directors

Salary 9,650,000 6,600,000 Medical reimbursement 59,706 33,410 Contribution to Provident Fund 1,188,000 1,188,000

Perquisites:

Residential accommodation 415,350 1,320,000 Other perquisites 246,823 312,642 11,559,879 9,454,052

d. Sundry creditors - Small Scale Undertakings includes Rs. 10,254,471 /- (previous year Rs.3,971,494/-), outstanding for more than 30 days, within the agreed terms (Atop Fasteners, Grip Engineers Pvt. Ltd., Indian Organic Corporation J Engineering Works, MTE Industries Pvt. Ltd., Paras Enterprises, Sarita Chemicals, Shiv Shakti Office Equipment, Skytone Electricals (India) Ltd., Push-up Tools Udyog Pvt. Ltd., Rahul Industries, Real Engineers & Fabricators, Rishi Tools Udyog, Jullundra Engg. Works, Kanika Engg. Works, Naveen Engineering Works, Minku Engg. Works, R K Engg. Company, Salim Engg. Works, S S Industrial Corporation, Standard Fasteners, J S Industries, A T Packaging, Amar Scales, Capital Packaging, Castwell Foundries, Coral Enterprises, Glory Elevators, Premier Products, RNS Containers Pvt. Ltd., Rishi Precision Tools, Sarita Chemicals, Shiv Shakti Office, Indian Organic Corp., Ashoka Enterprises, Chintamani Enterprises, Yash Electroplators, Grip Engineers Pvt., Powercon, ACME Heat Furnaces Pvt. Ltd, Cenlub System, Joneja Bright (P) Ltd., Nirman Industries).

e. The company is in the business of manufacture of high tensile fasteners. Since the company is operating in single line of product and there being no reportable segment, the requirements of Accounting Standard 17 on Segment Reporting are not applicable to the company.

The Provision for deferred tax liability (net) of Rs. 11,313,944/- (Previous year Rs. 9,218,641/-) for the year ended March 31, 2007 has been charged to the Profit and Loss account under the head Provision for Taxes.

f. Expenses / (Income) pertaining to previous year included under different heads: Sales Promotion - Rs 10,756/- and Depreciation - Rs. 128,081/- ; Total : Rs. 138,837 /-(Previous year - (Net : Rs. 3080)).

g. In view of the management, the current assets loans and advances have a value on realization in the ordinary course of business at least equal to the amount at which they are stated in the balance sheet as at 31.03.2007. The balances of debtors, creditors, loans and advances are subject to confirmation.

h. Previous year figures have been rearranged, regrouped and recast wherever considered necessary.

i. All financial figures have been rounded off to the nearest rupee.

---

Mar 31, 2006

A. Estimated amount of contracts remaining to be executed on the capital account and not provided for in the accounts Rs. 57,614,166/- (Previous year Rs. 6,934,300/-)

b. Contingent liability

Contingent liability on account of bills discounted is Rs. 60,929,325/- (Previous year. Rs. 99,291,813/-).

Current year Previous year Rs. Rs.

c. Remuneration to the Auditors

Audit fee 220,000 144,000

Tax Audit Fee 30,000 24,000

Other Matters - -

Service Tax 30,600 17,136

Out of Pocket expenses 60,071 50,661

d. Remuneration to the Managing Director and Whole Time Directors

Salary 6,600,000 4,135,500

Commission on net profit - 3,600,000

Medical reimbursement 33,410 19,625

Contribution to Provident Fund 1,188,000 496,260

Perquisites:

Residential accommodation 1,320,000 292,500

Other perquisites 312,642 267,666

9,454,052 8,811,551

Current year Previous year Rs. Rs.

e. Computation of Net Profit as per Section 349 of Companies Act 1956 for calculation of Commission payable to Managing Directors & Whole-Time Directors.

Profit as per Profit and Loss Account 85,955,189 111,366,279

Add : Depreciation charged to the 36,064,064 30,949,401

Profit and Loss Account Loss on sale of fixed assets debited to 654,502 391,556

Profit and Loss Account Managerial Remuneration 9,454,052 8,811,551

Less: Depreciation Charged to Profit & Loss A/c 36,064,064 30,949,401

Net Profit as per Section 349 of the 96,063,743 120,569,386 Companies Act, 1956

g. Sundry creditors - Small Scale Undertakings includes Rs. 3,971,494/- (previous year Rs.3,383,804/-), outstanding for more than 30 days, within the agreed terms (Atop Fasteners, Trident Packaging Pvt. Ltd., Paras Lamipacks Pvt. Ltd., Nuage Tools Pvt. Ltd., Premier Products, Rohan Industries, Thermotech Ceramics, Sidhant India Pvt. Ltd., Dropco Multilub Systems Pvt. Limited, Pushup Thread Dies Pvt. Ltd., J.S. Industries, Khubros Automotive Industries, Aggarwal Sales Corp., Anand Prayag Udyog, ASB India Pvt. Ltd., Bon Don Products, Indian Organic Corp., Mullowal Industries).

h. The company is in the business of manufacture of high tensile fasteners. Since the company is operating in single line of product and there being no reportable segment, the requirements of Accounting Standard 17 on Segment Reporting are not applicable to the company.

j. Earning per Share - (Accounting Standard -20)

Current Year Previous Year

Profit after Tax (Rs.) 54,326,863 72,990,808

Weighted average equity Shares outstanding (Nos) 68,44,600 68,44,600

Earning per Share - basic/diluted (Rs) 7.94 10.66

l. Expenses/(Income) pertaining to previous year included under different heads : Printing & Stationery - Rs.36,374 ; Repairs - others - Rs.27,000 ; Miscellaneous expenses - Rs. 11,157 ; Consumable stores & tools - Rs. (72,511) and Charity & Donation Rs. (5,100) - Net Rs. (3,080), (Previous year - Nil).

m. In view of the management, the current assets loans and advances have a value on realization in the ordinary course of business at least equal to the amount at which they are stated in the balance sheet as at 31.03.2006. The balances of debtors, creditors, loans and advances are subject to confirmation.

n. Previous year figures have been rearranged, regrouped and recast wherever considered necessary.

o. All financial figures have been rounded off to the nearest rupee.

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Mar 31, 2004

1. Notes to Accounts

a. Estimated amount of contracts remaining to be executed on the capital account and not provided for in the accounts is Rs. 62,947,537/- (Previous year Rs. 8,174,441/-)

b. Contingent liability :

i) Contingent liability on account of bills discounted is Rs. 60,793,918/-. (Previous year: Rs.28,130,962/-)

ii) Appeal against the demand of Rs. 3,318,784/- from the Income Tax Authorities has been decided by the ITAT. As per the order of ITAT, the demand of Rs. 1,586,310/- has been deleted and Department has filed appeal against the order with the High Court of Delhi. Company has already deposited Rs 1,950,132/- against the balance demand.

c. Sundry creditors-Small Scale Undertakings includes Rs.2,446,379/- (previous year Rs. 1,344,5687), outstanding for more than 30 days, within the agreed terms (Atop Fasteners, Spectro Analytical Labs Pvt. Ltd., Trident Packaging Pvt. Ltd., Maina Engineering Works, Paras Lamipacks Pvt. Ltd., Super Dies Mfg. Co.,Khurbros Automotive Industries, Nuage Tools Pvt. Ltd., Premier Products , Rohan Industries, Thermotech Ceramics, Sidhant India Pvt. Ltd., Dropco Engineers, Pushup Thread Dies Pvt. Ltd.)

The Provision for deferred tax liability (net) of Rs. 12,929,975/- (Previous year Rs. 9,129,513/-) for the year ended March 31, 2004 has been charged to the Profit and Loss account under the head Provision for Taxes.

d. `Other Income' includes the income of Rs. 4,26,100/- which pertain to previous year.

e. Previous year figures have been rearranged, regrouped and recast wherever considered necessary.

f. All financial figures have been rounded off to the nearest rupee.

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Mar 31, 2003

1. Notes to Accounts

a. Estimated amount of contracts remaining to be executed on the capital account and not provided for in the accounts Rs. 8,174,4417- (Previous year Rs.15,143,131/-)

b. Contingent liability:

i) Contingent liability on account of bills discounted is Rs.28,130,9627- (Previous year : Rs.8,974,522/-)

ii) The company has received a demand for Rs 3,218,7847- from the income tax Authorities in 1996-97 on completion of Block Income Tax Assessment, against which appeal of the Company is pending before I T A T. Company has already deposited Rs 1,950,1327- against the above demand, under protest .

g. Sundry creditors-Small Scale Undertakings includes Rs.13,44,5687- (previous year Rs.9,03,655/-), outstanding for more than 30 days, within the agreed terms ( Atop Fasteners, Spectro Analytical Labs Pvt. Ltd., Trident Packaging Pvt. Ltd., Maina Engineering Works, Paras Lamipacks Pvt. Ltd., Super Dies Mfg. Co.)

The Provision for deferred tax liability (net) of Rs.91,29,513/- (Previous year Rs. 29,19,495) for the year ended March 31, 2003 has been charged to the Profit and Loss account under the head Provision for Taxes.

k. Previous year figures have been rearranged, regrouped and recast wherever considered necessary.

l. All financial figures have been rounded off to the nearest rupee.

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Mar 31, 2002

Share Capital:

22,80,000 equity shares have been allotted as fully paid up bonus shares by capitalisation of general reserves in financial year 94-95

Secured Loans:

1. Working Capital Limits

Secured by hypothecation of Stock in Trade, Receivables and equitable mortgage of Land and Building.

2. Term Loans

- Secured by hypothecation of Plant & machinery, Movable assets, other fixed assets and guaranteed by Directors.

- Repayable within one year Rs. 12439432/- (Previous year: Rs. 6700200/-)

Other Notes:

a. Estimated amount of contracts remaining to be executed on the capital account and not provided for in the accounts Rs. 1,51,43,131/- (Previous year Rs. 20,06,479/-)

b. Contingent liability:

i) Contingent liability on account of bills discounted is Rs. 89,74,522/- (Previous year: Rs. Nil)

ii) The company has received a demand for Rs 3218784/- from the income tax Authorities in 1996-97 on completion of Block Income Tax Assessment, against which appeal of the Company is pending before I T A T. Company has already deposited Rs 1950132/- against the above demand, under protest.

c. Sundry creditors - Small Scale Undertakings includes Rs. 9,03,655/- (previous year Rs. 20,60,514/-, exceeding Rs. 1 Lacs, each outstanding for more than 30 days, within the agreed terms (Atop Fasteners, Spectro Analytical Labs Pvt. Ltd., Trident Packaging Pvt. Ltd., Mani Engineering Works, Paras Lamipacks Pvt Ltd., Super Dies Mfg. Co.)

d. Previous year figures have been rearranged, regrouped and recast wherever considered necessary.

e. Ail financial figures have been rounded off to the nearest rupee.

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Mar 31, 2001

SHARE CAPITAL

Of the above, 22,80,000 equity shares have been allotted as fully paid up bonus shares, by capitalisation of general reserves in financial year 1994-95.

SECURED LOANS

1. Working Capital Limits

Secured by hypothecation of Stock in Trade, Receivables and equitable mortgage of Land and Building.

2. Term Loans

Secured by hypothecation of Plant & machinery, Movable assets, other fixed assets and guaranteed by Directors. Repayable within one year Rs. 6700200/- (Previous year : Rs. 6618614/-)

OTHER NOTES

1. Estimated amount of contracts remaining to be executed on the capital account and not provided for in the accounts Rs. 2006479/- (Previous year Rs. 1,02,96,441/-)

2. Contingent liability :

i) Contingent liability on account of bills discounted is Rs. Nil (Previous year: Rs. 586705/-)

ii) The company has received a demand for Rs. 3218784/- from the Income Tax Authorities in 1996-97 on completion of Block Income Tax Assessment, against which appeal of the Company is pending before ITAT.

Company has already deposited Rs. 1850132/- against the above demand, under protest.

3. Sundry creditors-Small Scale Undertakings includes Rs. 2060514/- (previous year Rs. 743831/-, exceeding Rs. 1 Lacs, each outstanding for more than 30 days, within the agreed terms (Atop Fasteners, Spectro Analytical Labs Pvt. Ltd., Trident Packaging Pvt. Ltd., Mani Engineering Works, Paras Lamipacks Pvt Ltd., Super Dies Mfg. Co.)

4. Previous year figures have been rearranged, regrouped and recast wherever considered necessary.

5. All financial figures have been rounded off to the nearest rupee.

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Mar 31, 2000

A. Estimated amount of contracts remaining to be executed on the capital account and not provided for in the accounts Rs. 10296441/- (Previous year Rs. 1,31,47,338/-)

b. Contingent liability:

i) Contingent liability on account of bills discounted is Rs.5,86,705/- (Previous year :Rs.29,99,472/-).

ii) Block Assessment :The Block Income Tax Assessment of the Company was done during the year 1996-97 by Assessing Authority. The total demand raised by the Assessing Officer was Rs.32,18,784/-, which was disputed and contested in appeal.

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Mar 31, 1999

1. Working Capital Limits

Secured by hypothecation of Stock in Trade, Receivables and equitable mortgage of Land and Building.

2 Term Loans

Secured by hypothecation of Plant & machinery, movable assets, other fixed assets and guaranteed by Directors.

Repayable within one year Rs. 8742120/- (Previous year : Rs. 1,03,00,374/-)

a. Estimated amount of contracts remaining to be executed on the capital account and not provided for in the accounts Rs. 13147338/- (Previous year Rs. 26,49,888/-)

b. Contingent liability :

i) Contingent liability on account of bills discounted is Rs. 2999472/- (Previous year : Rs. 29,18,170/-).

ii) Block Assessment : The Block Income Tax Assessment of the Company was done during the year 1996-97 by Assessing Authority. The total demand raised by the Assessing Officer is Rs. 32,18,784/-, which was disputed and contested in appeal. c. Remuneration to the Auditors Current year Previous year Rs. Rs. Audit fee 90000 90000 Tax Audit Fee 10000 10000 For Income Tax matters -- 11000 Fees for other services -- 20000 Out of Pocket expenses 28034 34688

Current year Previous year Rs. Rs. d. Remuneration to the Managing Director and Whole time directors Salary 2400000 2085000 Commission on net profit 300000 300000 Medical reimbursement 28617 32150 Contribution to Provident Fund 288000 231960 Taxable value of perquisites : Residential accommodation 30000 30000 Other perquisites 102528 82958 3149145 2762068

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Mar 31, 1998

No significant notes to accounts.

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Mar 31, 1997

1. Working Capital limits

Secured by hypothecation of stock in Trade, Receivables and equitable mortgage of land and building.

2. Term loans

Secured by hypothecation of Plant & machinery, movable assets, other fixed assets, FDR and guaranteed by Directors.

3. Term loan instalments payable within one year

Rs. 86,58,248/- (Previous year Rs. 87,60,000/-)

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Mar 31, 1996

2. Notes to accounts

a. Estimated amount of contracts remaining to be executed on the capital account and not provided for in the accounts Rs. 97,99,169/- (Previous year Rs. 34,58,760/-)

b. Contingent liabilities

i) Bills/cheques discounted Rs. 58,77,594/- (Previous year : Rs. 22,56,384/-)

ii) Claim not acknowledged as debt by the company : Rs. 18,28,000/- (Previous year : Nil)

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Mar 31, 1995

Contingent Liabilities : A counter guarantee for Rs. 455285/- given to Oriental Bank of Commerce, Faridabad in connection with a guarantee furnished to the Government of India in respect of export obligation of the company.

Estimated amount of contracts remaining to be executed on the capital accounts and not provided for in the accounts Rs. 34,58,760/- (Previous year Rs. 8,14,860/-).

Inventories have been taken, verified and valued by the management and the same have been accepted by the auditors, being a technical matter.

Expansion project

The company is implementing an expansion project, partly financed by a public issue of equity shares made in April, 1995. The capital expenditure incurred on the said project is disclosed as Capital work in progress in Schedule 55. The revenue expenditure incurred on the said project is also disclosed in the same schedule, and would be apportioned to the fixed assets and capitalised, on the completion of the project.

The Chairman & Managing Director, and the two whole time Directors were reappointed for a period of five years with effect from 01.11.1994, in an extra ordinary general meeting held on the said date. The terms of employment of each of the said persons provide for payment of commission at the rate of 1% of the net profits of the financial year, subject to a ceiling of the annual salary, and subject further to the overall ceiling for managerial remuneration as laid down in Section 198 of the Companies Act, 1956. The terms of employment applicable to the period prior to 01.04.1994, did not, however, provide for payment of commission, and further as the company became a public company only on 21.10.1994, the computation of net profits for the year ended 31.03,1994 has not been furnished.

Additional information pursuant to Para 3 & 4 of Part-II of Schedule VI to the Companies Act, 1956, is as under.

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Mar 31, 1994

1. Estimated amount of contracts remaining to be executed on capital account Rs. 8,14,860/- (Previous year Rs. 1,85,000/-).

Contingent Liabilities - NIL (Previous year - NIL)

Inventories have been taken, verified and valued by the management and the same have been accepted by the auditors, being a technical matter.

For and upto the financial year ended 31.03.1993, depreciation was being charged on Written Down Value basis of rates which were different and/or higher than those prescribed in Schedule XIV to the Companies Act, 1956.

During the year ended 31.03.1994, the accounting policy of the Company on depreciation has been reviewed, and it has been decided to change the basis of charging depreciation to Straight Line Method.

Consequent upon the amendment to Schedule XIV to the Companies Act, 1956, vide notification dated 16.12.1993 of the Department of Company Affairs, the useful life of the depreciable assets has also been reviewed, and on the basis of the said review, it has been decided to adopt the rates prescribed in the said Schedule.

The change, in the method and the rates of depreciation, has been carried out as it is considered that the change would result in a more appropriate presentation of the accounts of the Company.

The depreciation charged for the year ended 31.03.1994 has been computed in the said manner. Further the aggregate depreciation charged upto 31.03.1993 has also been re-computed in the manner described above, and as prescribed in the Accounting Standard-VI issued by the Institute of Chartered Accountants of India, the net excess depreciation determined on the basis of the said recomputation, amounting to Rs 84,45,287, has been written back and credited to the Profit and Loss Account for the year ended 31.03.1994.

Additional information pursuant to para 3 & 4 of Part - II of Schedule Vi to the Companies Act, 1956, is as under:

Total working days during the year: 305 days (previous yea: 305 days)

Previous year's figures have been rearranged and recast where ever necessary.

All financial figures have been founded off upto nearest rupee.