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A Oneindia Venture

Nifty 25,966.40 +0.58%

22k Gold ₹ 12,300 /gm

Sensex 84,929.36 +0.53%

Nifty 25,966.40 +0.58%

22k Gold ₹ 12,300 /gm

Sensex 84,929.36 +0.53%

Nifty 25,966.40 +0.58%

22k Gold ₹ 12,300 /gm

Notes to Accounts of Welspun Specialty Solutions Ltd.

Mar 31, 2025

b) Terms and rights attached to equity shares

The Company has 662,611,445 equity shares having (March 31, 2024: 530,089,156 equity shares) par value of H 6/- each fully paid up. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends, if any, in Indian rupees. The dividend proposed if any, by the Board of Directors is subject to the approval of the Shareholders in 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.

Nature and purpose of other equity

(i) Securities premium

Securities premium is used to record the premium on issue of shares. The reserve is utilised in accordance with the provisions of the Companies Act, 2013. On February 24, 2025, the Rights Issue Committee of the Board of Directors of the Company approved issuance of 13,25,22,289 Equity Shares of Face Value of H 6 each at a price of H 26.40 per Rights Equity Share (including Premium of H 20.40 per Rights Equity Share), in the ratio of 1 Rights Equity Share for every 4 existing fully paid equity shares held by the eligible equity shareholders as on March 01, 2025, the Record Date. Rights issue expenses of H 217 lakhs has been adjusted against securities premuim account.

(ii) General reserve

General Reserve represents appropriation of profit by the Company. General reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive income.

(iii) Retained Earnings

Retained earnings comprises of prior years as well as current year''s undistributed earnings after taxes.

Nature and purpose of other reserve Cash flow hedging reserve

The cash flow hedging reserve represents the cumulative effective portion of gains or losses arising on changes in fair value of designated portion of hedging instruments entered into for cash flow hedges. The cumulating gain or loss arising on changes in the fair value of the designated portion of hedging instruments that are recognised and accumulated under the heading of cash flow reserve will be reclassified to statement of profit and loss only when the hedged transaction affects the profit or loss or included as a basis adjustment to the non-financial hedged item.

(i) Term loan

Rupee term loan of H Nil ( March 31, 2024: H 1,930 Lakhs (including current maturities of H 965 Lakhs) (Previous year H 2,895 Lakhs, including current maturities of H 965 Lakhs) is secured as per details below:

1. First Pari Passu charge on Property, plant and equipment and Right-of-use assets of the Company both present and future.

2. Second Pari Passu charge on all current assets of the Company both present and future.

3. Corporate Guarantee by Welspun Corp Limited.

The Rupee term loan carries interest rate of 8.72%-9.25% p.a. (March 31, 2024: 8.26%-8.85% p.a.). varies from bank to bank. It is reset after every 3 months based on the RBI interest rate. Interest are charged either on 3MT-Bill plus margin or 1 YR MCLR plus margin.

a. The non-cumulative redeemable preference shares carry dividend of 12% per annum;

b. The non-cumulative redeemable preference shares are redeemable at par on February 19, 2033 or any date before based on the availability of the cash flow.

Cash credit from banks is secured by way of:

i. First Pari Passu charge on all current assets of the Company both present and future.

ii. Second Pari Passu charge on Property, plant and equipment and Right-of-use assets of the Company both present and future.

iii. Corporate Guarantee by Welspun Corp Limited.

Interest on cash credit ranges from 8.72% to 9.25% (March 31,2024: 8.50% to 9.65%) varies from bank to bank. It is reset after every 3 months based on the RBI interest rate. Interest are charged either on 3 months T-Bill plus margin or 1 year MCLR plus margin.

20 (b) Trade payables for acceptances represents the interest bearing credit offered by the supplier which is secured against Usance Letter of Credit (LC) Under this arrangement, the supplier is eligible to receive payment from negotiating bank prior to the expiry of the credit period. The interest for the credit period payable to the bank on maturity of the LC has been presented under Finance Cost.

The Company is primarily engaged in the business of manufacture and distribution of steel and steel products and revenue from such products is derived from transfer at a point in time which is shown under sale of products as above.

Revenue from operations is same as contract price and no discount or any other adjustments required to be done.

The amount of H 582 lakhs included in contract liabilities at 31 March 2024 has been recognised as revenue during the year ended 31 March 2025. (The amount of H 498 lakhs included in contract liabilities at 31 March 2023 has been recognised as revenue during the year ended 31 March 2024).

No information is provided about remaining performance obligations at 31 March 2025 or at 31 March 2024 that have an original expected duration of one year or less, as allowed by Ind AS 115.

The Company applies the optional practical expedient to immediately expense sales commission since the amortisation period of the asset that would have been recognised is one year or less.

32 Going Concern

During the current year, the Company has raised funds by way of Rights issue, for an aggregate amount of H 34,986 lakhs to the eligible equity shareholders. The net worth of the Company is positive as at March 31, 2025. The Company also has positive cashflows for the year ended March 31, 2025.

The Company is confident of its ability to meet the funds requirement and to continue its business as a going concern and accordingly, the financial statements have been prepared on that basis.

33 In the FY 2022-23, the Company reassessed the nature of 12% Non-Cumulative Redeemable Preference Shares (NCRPS), resulting in change in liability portion of the same. On initial recognition the fair value of the instrument is bifurcated into liability and equity component. The fair value of the liability component on initial recognition was determined as the present value of the eventual redemption amount discounted at the market rate of return. The equity component was the residual amount. (Refer Note 16 a(iv))

34 The Company is eligible for refund of State Goods and Service Tax paid through cash ledger under the âScheme for Relief and Concessions to the viable sick industrial enterprisesâ issued by the Government of Gujarat Industries & Mines Department. The scheme was launched by the Government of Gujarat for the rehabilitation of sick enterprises registered with the Board for Industrial and Financial Reconstruction/ Gujrat Board for Industrial and Financial Reconstruction. During the year, the Company has recognised an income of H 1,559 Lakhs (Previous year - H 1,181 Lakhs) on account of such refund and the same has been recognised under the head ''Other Income''.

B. Defined Benefit Obligations (i) Gratuity

The Company has a defined benefit gratuity plan in India, governed by the Payment of Gratuity Act, 1972. The plan entitles an employee, who has rendered at least five years of continuous service, to gratuity at the rate of fifteen day wages for every completed year of service or part thereof in excess of six months, based on the rate of wages last drawn by the employee concerned. The gratuity plan is unfunded and the Company does not make any contributions to funds.

This defined benefit plans expose the Company to actuarial risks, such as interest rate risk.

37 a)	Contingent liabilities and capital commitments Contingent liabilities The Company has contingent liabilities as at the year end in respect of:
		As at March 31, 2025	As at March 31, 2024
b)	Claims against the Company not acknowledged as debts	255	328
	Disputed indirect taxes:
	Sales tax/ Value Added Tax	20	20
	It is not practicable for the Company to estimate the timings of cash outflows, if any, in respect of above pending resolution of the respective proceedings. The Company does not expect any re-imbursements in respect of the above contingent liabilities. Capital commitments Capital expenditure contracted for at the end of the reporting period but not recognised as liabilities is as follows:
		As at March 31, 2025	As at March 31,2024
	Estimated amount of contracts remaining to be executed on capital account (net of advances):	2,031	21

38 Segment information

a) Description of segments and principle activities

The Company''s chief operating decision maker consists of the Board of Directors (BOD) and Chief Executive Officer (CEO) of the Company who examines the Company''s performance only from the product perspective and has accordingly, identified only one reportable segment which is manufacturing and sale of steel and steel products.

b) The chief operating decision maker primarily uses a measure of profit before tax as included in the internal management report to assess the performance of the operating segment which is measured consistently with profit or loss in the financial statements.

The Company has unabsorbed tax losses and depreciation that are available for offseting against future taxable profits of the Company. The Company had recognised deferred tax assets on the brought forward losses and unabsorbed depreciation

The Company has unabsorbed tax losses and depreciation that are available for offsetting against future taxable profits of the Company. In view of the profit made during the financial year 2023-24 and expected continued profitability in future. The Company has recognised net deferred tax asset of H 3,340 lakhs as at March 31, 2025 (H 3,387 lakhs as at March 31, 2024). Based on the projection of taxable profit for the next 3 years on prudent basis.

Estimation of Deferred tax recoverable Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the same can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits together with future tax planning strategies. The Company has recognised deferred tax assets on carries forward losses and accumulated depreciation. The Company has made losses in the past. In the current year, the Company has made taxable profit and is expected to continue to make profit in the future. Hence the Company has recognises deferred tax assets based on projected profit in the next four years. The Company will continue to evaluate the expected recovery and recognises additional deferred tax assets in the future as considered appropriate.

In the previous year the Company had recognised deferred tax assets on carried forward losses as the Company has made taxable profit and expected to continue to make profit in the future. However, in the current year the company''s performance has seen dip in quarter two and then has been improving every quarter, but full year has seen lower profit than previous year. The Company has not made any changes to deferred tax assets based on projected profit in the next three years. The Company will continue to evaluate the expected recovery and recognises additional deferred tax assets in the future as considered appropriate.

b) Fair value hierarchy

This section explains the judgements 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 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.

Level 1: This hierarchy includes financial instruments measured using quoted prices. There is no item under this category as at March 31, 2025 and as at March 31, 2024.

Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted securities.

e) Valuation techniques used to determine fair value

The fair values of liability component of Compound financial instrument (Borrowing) is based on discounted cash flows using a credit adjusted borrowing rate as at the reporting date.

The fair value of forward contracts is determined using forward exchange rates prevailing with Authorised Dealers dealing in foreign exchange.

The fair value of bonds and government securities are derived based on the indicative quotes of price and yields prevailing in the market or latest available prices.

(i) The carrying amounts of cash and cash equivalents, other bank balances, trade receivables, current borrowings including accrued interest, trade payables and other current financial liabilities are considered to be the same as their fair values due to their short term nature.

(ii) The fair values and carrying values of borrowings (other than that referred in (i) above ) are materially the same.

43 Financial risk management objectives and policies

The Company''s activities expose it to market risk, liquidity risk and credit risk. In order to minimise any adverse effects on the financial performance of the Company, derivative financial instruments, such as foreign exchange forward contracts are entered to hedge certain foreign currency risk exposures. Derivatives are used exclusively for hedging purposes and not as trading or speculative instruments.

This note explains the sources of risk which the Company is exposed to and how the Company manages the risk and the impact of hedge accounting in the financial statements.

The Company''s risk management is carried out by treasury department under policies approved by the board of directors. Treasury department identifies, evaluates and hedges financial risks. The board provides written principles for overall risk management, as well as policies covering specific areas, such as foreign exchange risk, interest rate risk, credit risk, use of derivative financial instruments and non-derivative financial instruments and investment of excess liquidity. There is no change in objectives, policies and process for managing the risk and methods used to measure the risk as compared to previous year.

A Credit risk on financial assets

Credit risk is the risk that counterparty will not meet its obligation under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with bank, foreign exchange transactions and other financial instruments. The Company considers the probability of default upon initial recognition of asset and whether there has been a significant increase in credit risk on an ongoing basis throughout each reporting period. To assess whether there is a significant increase in credit risk the Company compares the risk of a default occurring on the asset as at the reporting date with the risk of default as at the date of initial recognition.

a) Trade receivables

Trade receivables are typically unsecured and are derived from revenue earned from customers. Credit risk has been managed by the Company through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business.

Receivables are deemed to be past due or impaired with reference to the Company''s normal terms and conditions of business. The expected loss rates are based on the payment profile of sales over of a period of 36 months before the reporting date and the corresponding historical credit losses experienced within this period.

The credit quality of the Company''s customers is monitored on an ongoing basis and assessed for impairment where indicators of such impairment exist. The Company uses simplified approach (i.e. lifetime expected credit loss model) for impairment of trade receivables/ contract assets. The solvency of the debtor and their ability to repay the receivable is considered in assessing receivables for impairment. Where receivables have been impaired, the Company actively seeks to recover the amounts in question and enforce compliance with credit terms.

The Company was engaged in the production of Stainless Steel, Pipe and Alloy. The Company had significant loss allowance on trade receivables from Alloy business. However, the Company is not producing Alloy products currently. Based on the past exposure, there is low credit risk or allowance of trade receivable required on steel and pipe business. Exposures of trade receivable broken into ageing bucket. The Company''s trade receivable do not carry a significant financing element. Hence, trade receivables are measured at transaction price. The Company makes a loss allowance using simplified approach for expected credit loss and on a case to case basis.

b) Other financial assets

The Company maintains exposure in cash and cash equivalents, other bank balances, derivative financial instruments. Credit limits and concentration of exposures are actively monitored by the Company.

Expected credit loss for other than trade receivables has been assessed and based on life-time expected credit loss, no loss allowance provision has been required.

B Liquidity risk

Liquidity risk is the risk that the Company may not be able to meet its present and future cash and collateral obligations without incurring unacceptable losses. The Company''s objective is to, at all times maintain optimum levels of liquidity to meet its cash and collateral requirements. The Company closely monitors its liquidity position and deploys a robust cash management system. It maintains adequate sources of financing including debt and overdraft from banks at an optimised cost. The company is also supported by holding company as and when the need arises.

The Company maximum exposure to credit risk for the components of the balance sheet at March 31, 2024 and March 31,2023 is the carrying amounts. The liquidity risk is managed on the basis of expected maturity dates of the financial liabilities. The average credit period taken to settle trade payables is about 45 -180 days. The other payables are with short-term durations. The carrying amounts are assumed to be a reasonable approximation of fair value.

b) Maturities of financial liabilities

The tables below analyse the Company''s financial liabilities into relevant maturity groupings based on their contractual maturities for:

'' All non-derivative financial liabilities, and derivative financial instruments for which the contractual maturities are essential for an understanding of the timing of the cash flows.

The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances as the impact of discounting is not material.

C Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk. Financial instruments affected by market risk include loans and borrowings, deposits and derivative financial instruments.

(i) Foreign currency risks

The Company undertakes transactions denominated in foreign currencies; consequently, exposures to exchange rate fluctuations arise. Exchange rate exposures are managed within approved policy parameters utilising forward foreign exchange contracts.

The Company uses foreign currency forward contracts to hedge its risks associated with foreign currency fluctuations relating to certain firm commitments, highly probable forecast transactions and foreign currency required at the settlement date of certain receivables/payables. The use of foreign currency forward contracts is governed by the Company''s strategy approved by the board of directors, which provide principles on the use of such forward contracts consistent with the Company''s risk management policy and procedures.

Foreign currency exposures specifically covered by forward exchange contracts as at year end are as follows:

The Company''s exposure to foreign currency risk at the end of the reporting period expressed in equivalent in Rupees Lakhs is as follows:

Derivative financial instruments such as foreign exchange forward contracts are used for hedging purposes and not as trading or speculative instruments.

Foreign currency exposures not specifically covered by forward exchange contracts as at year end are Nil.

Foreign currency sensitivity

The Company does not have any unhedged foreign currency exposure, hence there is no foreign currency exchange risk. (ii) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates.

Company has interest rate risk exposure mainly from changes in rate of interest on borrowing & on deposit with bank. The interest rate is disclosed in the respective notes to the financial statements of the Company. The Company''s fixed rate borrowings are carried at amortised cost. They are therefore not subject to interest rate risk as defined in Ind AS 107. The following table analyses the breakdown of the financial assets and liabilities by type of interest rate:

The Company uses forward contracts to hedge its risks associated with foreign currency fluctuations relating to certain firm commitments, highly probable forecast transactions and foreign currency required at the settlement date of certain receivables/payables. The use of forward contracts is governed by the Company''s strategy approved by the board of directors, which provide principles on the use of such forward contracts consistent with the Company''s risk management policy.

The Company''s hedging policy only allows for effective hedge relationships to be established. Hedge effectiveness is determined at the inception of the hedge relationship, and through periodic prospective effectiveness assessments to ensure that an economic relationship exists between the hedged item and hedging instrument. The Company enters into hedge relationships where the critical terms of the hedging instrument match exactly with the terms of the hedged item, and so a qualitative assessment of effectiveness is performed. If changes in circumstances affect the terms of the hedged item such that the critical terms no longer match exactly with the critical terms of the hedging instrument, the Company uses the hypothetical derivative method to assess effectiveness. Ineffectiveness is recognised on a cash flow hedge and net investment hedge where the cumulative change in the designated component value of the hedging instrument exceeds on an absolute basis the change in value of the hedged item attributable to the hedged risk. In hedges of foreign currency forecast sale and purchase transactions, hedges of interest rate risk and hedges of net investment, as applicable, this may arise if:

(i) The critical terms of the hedging instrument and the hedged item differ (i.e. nominal amounts, timing of the forecast transaction, interest resets changes from what was originally estimated), or

(ii) Differences arise between the credit risk inherent within the hedged item and the hedging instrument. There were no ineffectiveness recognised in the statement of profit and loss during March 31, 2025 and March 31, 2024.

44 Capital management

For the purpose of the Company''s capital management, capital includes issued equity capital, securities premium and all other equity reserves attributable to the equity holders. The primary objective of the Company''s capital management is to maximise the shareholder value.

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Company''s policy is to keep optimum gearing ratio. The Company includes within net debt, interest bearing loans and borrowings, trade and other payables, less cash and cash equivalents.

49 Note on Rights Issue

A) On February 24, 2025, the Rights Issue Committee of the Board of Directors of the Company approved issuance of 13,25,22,289 Equity Shares of Face Value of H 6 each at a price of H 26.40 per Rights Equity Share (including Premium of H 20.40 per Rights Equity Share), in the ratio of 1 Rights Equity Share for every 4 existing fully paid equity shares held by the eligible equity shares as on 1st March 2025, the Record Date.

The Rights Issue Committee (the âCommitteeâ) of the Company at its meeting held on March 24, 2025 approved the allotment of 13,25,22,289 fully paid-up Equity Shares at an issue price of H 26.40 per Rights Equity Share (including a premium of H 20.40 per Rights Equity Share) to eligible equity shareholders, pursuant to the Rights Issue.

The objects of the Rights Issue are to utilize the Net Proceeds for Repayment and/or Prepayment, in full or in part, of certain outstanding borrowings availed by the Company and General corporate purposes.

i) The company has raised H 34,986 lakhs.

ii) During the year ended 31st March 2025, the Company has utilized H 28,790 lakhs from the rights issue proceeds for repayment of borrowings and general corporate purpose as mentioned above.

iii) Balance proceeds from the rights issue is temporarily parked in the fixed deposits with bank.

B) There has been no deviation in the use of proceeds of the Rights Issue, from the objects stated in the Offer document.

50 Additional regulatory requirements under Schedule III

(i) Details of Benami Property held

No proceedings have been initiated on or are pending against the company for holding benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and Rules made thereunder.

(ii) Borrowing secured against current assets

The Company has borrowings from banks on the basis of security of current assets. The quarterly returns or statements of current assets filed by the Company with banks and financial institutions are in agreement with the books of accounts.

(iii) Willful defaulter

The company has not been declared willful defaulter by any bank or financial institution or government or any government authority.

(iv) Relationship with struck off companies

The company has no transactions with the companies struck off under Companies Act, 2013 or Companies Act, 1956.

(v) Compliance with number of layers of companies

The company has complied with the number of layers prescribed under the Companies Act, 2013.

(vi) Compliance with approved scheme(s) of arrangements

The Company has not entered into any scheme of arrangement which has an accounting impact on current or previous financial year.

(vii) Utilisation of borrowed funds and share premium

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:

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

b. provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries

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

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

b. provide any guarantee, security or the like on behalf of the ultimate beneficiaries

(viii) Undisclosed income

There is no income surrendered or disclosed as income during the current or previous year in the tax assessments under the Income Tax Act, 1961, that has not been recorded in the books of account.

(ix) Details of crypto currency or virtual currency

The company has not traded or invested in crypto currency or virtual currency during the current or previous year.

(x) Valuation of PP&E and intangible asset

The company has not revalued its property, plant and equipment (including Right-of-Use assets) or intangible assets or both during the current or previous year.

xi) Title deeds of immovable properties not held in name of the company

The title deeds of all the immovable properties (other than properties where the Company is the lessee and the lease agreements are duly executed in favour of the lessee), as disclosed in Note 3(a) on property, plant and equipment and 3(b) on right of use assets to the financial statements, are held in the name of the Company, except for the following:

(xii) Utilisation of borrowings availed from banks and financial institutions

The borrowings obtained by the company from banks and financial institutions have been applied for the purposes for which such loans were taken.

(xiii) Registration of Charges or satisfaction with Registrar of Companies (ROC)

The Company does not have any charge or satisfaction not registered with the ROC beyond the statutory period.

51 Core Investment Companies (CIC)

Management has assessed that there are three CIC in the Group (''Companies in the Group'' is as defined in Master Direction -Core Investment Companies (Reserve Bank) Directions, 2016, as amended).

Mar 31, 2024

(e) Provisions, contingent liabilities and contingent assets

(i) Provisions

Provisions for legal claims are recognised when the Company has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and the amount can be reliably estimated. Provisions are not recognised for future operating losses.

Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to any one item included in the same class of obligations may be small. Provisions are measured at the present value of management''s best estimate of the expenditure required to settle the present obligation at the end of the reporting period. The discount rate used to determine the present value is a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The increase in the provision due to the passage of time is recognised as interest expense.

The measurement of provision for restructuring includes only direct expenditures arising from the restructuring, which are both necessarily entailed by the restructuring and not associated with the ongoing activities of the Company.

(ii) Contingent liabilities

Contingent liabilities are disclosed when there is a possible obligation arising from past events the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the company or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle or a reliable estimate of the amount cannot be made.

(iii) Contingent assets

Contingent Assets are disclosed, where an inflow of economic benefits is probable.

(f) Leases

As a lessee

The Company has leasehold land, this land is for a period of ninety-nine years with an extension option for further ninety-nine years. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions.

Leases are recognised as a right-of-use assets and a corresponding lease liability at the date at which the leased assets is available for the use by the Company.

Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value of the following lease payments, as applicable:

â¢ fixed payments (including in-substance fixed payments), less any lease incentives receivable

â¢ variable lease payment that are based on an index or a rate, initially measured using the index or rate as at the commencement date

â¢ amounts expected to be payable by the Company under residual value guarantees

â¢ the exercise price of a purchase option if the lessee is reasonably certain to exercise that option, and

â¢ payments of penalties for terminating the lease, if the lease term reflects the lessee exercising that option.

Lease payment to be made under reasonably certain extension options are also included in the measurement of the liability. The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, the lessee''s incremental borrowing rate is used, being the rate that the lessee would have to pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic environment with similar terms, security and conditions.

Lease payments are allocated between principal and finance cost. The finance cost is charged to profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.

Right-of-use assets are measured at cost comprising the following, wherever applicable:

â¢ the amount of the initial measurement of lease liability

â¢ any lease payments made at or before the commencement date less any lease incentives received

â¢ any initial direct costs, and

â¢ restoration costs.

Right-of-use assets are generally depreciated over the shorter of the asset''s useful life and the lease term (including extension considering reasonable certainty), on a straight-line basis. If the Company is reasonably certain to exercise a purchase option, the right-of-use asset is depreciated over the underlying asset''s useful life.

Payments associated with short-term leases of equipment and all leases of low-value assets are recognised on a straightline basis as an expense in profit or loss. Short-term leases are leases with a lease term of 12 months or less. Low-value assets and short term lease assets comprises of laptops and other office equipments.

53 Previous Yearâs Figures

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

For Price Waterhouse Chartered Accountants LLP For and on behalf of the Board of Directors

Firm Registration Number: 012754N/N500016

Neeraj Sharma B.K. Goenka Anuj Burakia

Partner Chairman CEO & Whole Time Director

Membership No.108391 DIN: 00270175 DIN: 02840211

Brijveer Singh Suhas Pawar

Chief Financial Officer Company Secretary

ACS: 36560

Place: Mumbai Place: Mumbai

Date: April 26, 2024 Date: April 26, 2024

Mar 31, 2023

a) Terms and rights attached to equity shares

The Company has 530,089,156 equity share having par value of Rs. 6/- each fully paid up. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends, if any, in Indian rupees. The dividend proposed if any, by the board of Directors is subject to the approval of the Shareholders in ensuing annual general meeting.

(b) Securities Premium

Securities premium is used to record the premium on issue of shares. The reserve is utilised in accordance with the provisions of the Companies Act, 2013.

(b) Retained earnings

Retained earnings comprises of prior years as well as current year''s undistributed earnings after taxes.

General Reserve represents appropriation of profit by the Company. General reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive income.

Nature and purpose of other reserve Cash flow hedging reserve

(i) Term loan

Rupee term loan of Rs 2,895 Lakhs (including current maturities of Rs. 965 Lakhs) (Previous year Rs. 3,739 Lakhs, including current maturities of Rs. 844 Lakhs) is secured by way of:

1. First Pari Passu charge on Property, plant and equipment and Right-of-use assets of the Company both present and future.

2. Second Pari Passu charge on all current assets of the Company both present and future.

3. Pledge of Company''s Nil shares (Previous year 15,88,26,392 shares) held by ''Welspun Corp Limited''.

4. Corporate Guarantee by Welspun Corp Limited.

5. The Rupee term Loan carries interest rate of 6.55%-8.95% p.a. (March 31, 2022: 6.94% p.a.). Interest rate is derived from MCLR plus margin. Loan is repayable in 10 remaining quarterly instalments till September 30, 2025.

(ii) Loan from related party

1. Loan from related party is repayable as below Rs. 2,363 Lakhs is repayable on September 2024 Rs. 500 Lakhs is repayable on November 2024 Rs. 11,900 Lakhs repayable on April 2025

Rs. 3,500 Lakhs is repayable on June 2025

2. The loan from related party carries interest rate of 7.25% p.a. (March 31, 2022: 6.5%- 7.25% p.a.).

(iii) Inter corporate deposits from others

1. Inter corporate deposit of Rs. Nil (March 31, 2022: Rs. 4,995 Lakhs) has been repaid before the due date in current year.

2. The inter corporate deposit carried interest rate of 6% p.a.

iv Rights, preference and restrictions attached to preference shares

a. The non-cumulative redeemable preference shares carry dividend of 12% per annum;

b. The non-cumulative redeemable preference shares are redeemable at par on February 19, 2033 or any date before based on the availability of the cash flow.

c. Preference shares does not carry any voting rights in the Company, except as provided in the Companies Act, 2013. Preference share will have priority over equity shares in the payment of dividend and repayment of capital.

Cash credit from banks:

i. First Pari Passu charge on all current assets of the Company both present and future.

ii. Second Pari Passu charge on Property, plant and equipment and Right-of-use assets of the Company both present and future.

iii. Corporate Guarantee by Welspun Corp Limited.

iv. Interest on cash credit ranges from 7.10% to 8.90% varies from bank to bank. It is reset after every 3 months based on the RBI interest rate. Interest are charged either on T-Bill plus margin or MCLR plus margin.

32 Going Concern

The Company has accumulated losses as on March 31, 2023, however the net worth of the Company is positive. The Company has incurred net loss for year ended March 31, 2023 and March 31, 2022. The Company has obtained a support letter from its holding Company indicating that it will take necessary actions to organise for any shortfall in liquidity during the period of 12 months from the date of approval of the financial statements. Based on the above, the Company is confident of its ability to meet the funds requirement and to continue its business as a going concern and accordingly, the financial statements have been prepared on that basis.

33 In the current year, the Company reassessed the nature of 12% Non-Cumulative Redeemable Preference Shares (NCRPS), resulting in change in liability portion of the same. On initial recognition the fair value of the instrument is bifurcated into liability and equity component. The fair value of the liability component on initial recognition is determined as the present value of the eventual redemption amount discounted at the market rate of return. The equity component is the residual amount. Basis this change, the revised liability portion of the instrument as disclosed under non-current borrowings is Rs 1,315 Lakhs and 1481 Lakhs as compared to the originally reported liability of Rs 5,090 Lakhs and Rs. 5,090 as at April 01, 2021 and March 31, 2022 respectively. Further, the revised amount of other equity is higher by Rs 3,775 Lakhs and Rs. 3,609 Lakhs, at Rs. (24,113) Lakhs and at Rs. (27,444) Lakhs as compared to the originally reported amount of Rs. (27,888) Lakhs and Rs. (31,053) Lakhs as at April 01, 2021 and March 31, 2022 respectively. This change has also resulted into an increase in the loss for the year ended March 31, 2022 by Rs. 166 Lakhs and loss for the year ended March 31,2023 by Rs. 185 Lakhs.

34 The Company is eligible for refund of State Goods and Service Tax paid through cash ledger under the âScheme for Relief and Concessions to the viable sick industrial enterprisesâ issued by the Government of Gujarat Industries & Mines Department. The scheme was launched by the Government of Gujarat for the rehabilitation of sick enterprises registered with the Board for Industrial and Financial Reconstruction/ Gujrat Board for Industrial and Financial Reconstruction. During the year, the Company has recognised an income of Rs 906 Lakhs (Previous year - 184 Lakhs) on account of such refund and the same has been recognised under the head ''Other Income''.

B. Defined Benefit Obligations(i) Gratuity:

This defined benefit plans expose the Company to actuarial risks, such as interest rate risk.

Total compensated absences provision as on March 31, 2023 is Rs. 92 Lakhs (Rs. 71 Lakhs as on March 31, 2022).

Provision for compensated absences has been made on the basis of actuarial valuation carried out as at the balance sheet date.

The amount charged to the statement of profit & loss under Salaries and bonus in Note 28 Employee benefits expenses is Rs. 28 lakhs (March 31, 2022 - Rs.18 lakhs).

37 Share Based Payments

Employee Stock Option Plan of Welspun Specialty Solutions Limited

During the year ended March 31, 2019, the Company had instituted an RMG Alloy Steel Limited (erstwhile name of the Company) Employee Stock Option (Senior Management Personnel) Scheme, 2018 as approved by the shareholders dated May 15, 2018 for grant of stock option to senior managerial personnel of the Company.

During the year ended March 31,2023, the Company has recognised share option expenses in Statement of Profit and Loss of Rs. Nil (March 31,2022: Rs. 5 Lakhs). During the year ended March 31,2022, two employee availed the Employee Stock Option (Senior Management Personnel) Plan 2018 and were issued 667,850 Equity Shares at Rs. 25.50 each (including premium of Rs. 19.50 each), amounting to Rs. 170 Lakhs and were subscribed and fully paid up.

*The Company has granted Stock options at Nil cost to the employees of Company and thereby Exercise Price is Nil. However, for computation purpose under Black Scholes valuation, the Company has assumed the Exercise Price as Rs. 0.001.

38 Contingent liabilities and capital commitments a) The Company has contingent liabilities as at the year end in respect of:
Particulars	As at March 31, 2023	As at March 31,2022
Claims against the Company not acknowledged as debts	571	549
Disputed indirect taxes
Sales tax/ Value Added Tax	20	20
Service Tax	-	1
It is not practicable for the Company to estimate the timings of cash outflows, if any, in respect of above pending resolution of the respective proceedings. The Company does not expect any re-imbursements in respect of the above contingent liabilities. b) Capital commitments Capital expenditure contracted for at the end of the reporting period but not recognised as liabilities is as follows:
	As at March 31, 2023	As at March 31,2022
Estimated amount of contracts remaining to be executed on capital account (net of advances):	153	-

39 Segment Reportinga) Description of segments and principle activities

The Company''s chief operating decision maker consists of the board of directors (BOD) of the Company who examines the Company''s performance only from the product perspective and has accordingly, identified only one reportable segment which is manufacturing and sale of steel and steel products.

b) Fair value hierarchy

Level 1: This hierarchy includes financial instruments measured using quoted prices. There is no item under this category as at March 31, 2023 and as at March 31, 2022.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted securities.

c) Fair value measurements using significant unobservable inputs (level 3)

The following table presents the changes in level 3 items for the year ended March 31, 2023 and March 31, 2022:

e) Valuation techniques used to determine fair value

The fair values of liability component of Compound financial instrument (Borrowing) is based on discounted cash flows using a credit adjusted borrowing rate as at the reporting date.

The fair value of forward contracts is determined using forward exchange rates prevailing with Authorised Dealers dealing in foreign exchange.

(ii) The fair values and carrying values of borrowings (other than that referred in (i) above ) are materially the same.

43 Financial risk management objectives and policies

This note explains the sources of risk which the Company is exposed to and how the Company manages the risk and the impact of hedge accounting in the financial statements.

A Credit risk on financial assets

a) Trade receivables

Receivables are deemed to be past due or impaired with reference to the Company''s normal terms and conditions of business. These terms and conditions are determined on a case to case basis with reference to the customer''s credit quality and prevailing market conditions. The Company based on past experiences does not expect any material loss on its receivables and hence no provision is deemed necessary on account of expected credit loss (''ECL'').

Past exposure suggest a low/ minimum credit risk or allowances of debtors. Exposures of trade receivable broken into ageing bucket (refer table below). The Company''s trade receivable do not carry a significant financing element. Hence, trade receivables are measured at transaction price. The Company makes a loss allowance using simplified approach for expected credit loss and on a case to case basis.

b) Other financial assets

The Company maintains exposure in cash and cash equivalents, other bank balances, derivative financial instruments. Credit limits and concentration of exposures are actively monitored by the Company.

Expected credit loss for other than trade receivables has been assessed and based on life-time expected credit loss, loss allowance provision has been made.

B Market risk

(i) Foreign currency risks

Foreign currency exposures specifically covered by forward exchange contracts as at year end are as follows:

The Company''s exposure to foreign currency risk at the end of the reporting period expressed in equivalent in Rupees Lakhs is as follows:

Derivative financial instruments such as foreign exchange forward contracts are used for hedging purposes and not as trading or speculative instruments.

Foreign currency exposures not specifically covered by forward exchange contracts as at year end are Nil.

Foreign currency sensitivity

The Company does not have any unhedged foreign currency exposure, hence there is no foreign currency exchange risk.

(ii) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates.

Interest rate sensitivity

The following table demonstrates the sensitivity to a reasonably possible change in interest rates on that portion of loans and borrowings affected, after the excluding the credit exposure for which interest rate swap has been taken and hence the interest rate is fixed. With all other variables held constant, the Company''s profit/(loss) before tax is affected through the impact on floating rate borrowings, as follows:

C Liquidity risk

The Company maximum exposure to credit risk for the components of the balance sheet at March 31, 2023 and March 31, 2022 is the carrying amounts. The liquidity risk is managed on the basis of expected maturity dates of the financial liabilities. The average credit period taken to settle trade payables is about 45 -180 days. The other payables are with short-term durations. The carrying amounts are assumed to be a reasonable approximation of fair value.

b) Maturities of financial liabilities

The tables below analyse the Company''s financial liabilities into relevant maturity groupings based on their contractual maturities for:

All non-derivative financial liabilities, and derivative financial instruments for which the contractual maturities are essential for an understanding of the timing of the cash flows.

The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances as the impact of discounting is not material.

D Impact of hedging activities

directors, which provide principles on the use of such forward contracts consistent with the Company''s risk management policy.

(i) The critical terms of the hedging instrument and the hedged item differ (i.e. nominal amounts, timing of the forecast transaction, interest resets changes from what was originally estimated), or

44 Capital Management

For the purpose of the Company''s capital management, capital includes issued equity capital, Securities premium and all other equity reserves attributable to the equity holders. The primary objective of the Company''s capital management is to maximize the shareholder value.

Notes:

1 Total debt = Non-current borrowings and Current borrowings

2 Earning for debt service = Profit for the year Non-cash operating expenses like depreciation and other amortisations Interest

expenses

3 Debt service = Interest and principal repayments

4 Cost of Goods Sold = Cost of material consumed Changes in inventories of finished goods and work-in progress

5 Working capital =Current assets (-) Current liabilities

6 Capital employed = Tangible net worth Total debt

7 Net Credit purchases = Raw materials purchase during the year Stores and spares purchases during the year Other expenses (excluding non cash expenses)

50 Other income

Certain contractual disputes arose in past between the Company and its customer, a public sector undertaking (âPSUâ) in respect of supply of pipes by the Company to the PSU. The Hon''ble Supreme Court vide its order dated November 13, 2021 (âHon''ble SC Orderâ) upheld the entire arbitral award in favour of the Company. Accordingly, the Company received payment amounting to Rs.1,597 Lakhs (including interest) on March 25, 2022, which has been credited to Statement of Profit and Loss as Other Income for the year ended March 31,2022.

51 Additional Regulatory Requirements under Schedule III

(i) Details of Benami Property held

No proceedings have been initiated on or are pending against the company for holding benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and Rules made thereunder.

(ii) Borrowing secured against current assets

(iii) Wilful defaulter

The company has not been declared wilful defaulter by any bank or financial institution or government or any government authority.

(iv) Relationship with struck off companies

The company has no transactions with the companies struck off under Companies Act, 2013 or Companies Act, 1956.

(v) Compliance with number of layers of companies

The company has complied with the number of layers prescribed under the Companies Act, 2013.

(vi) Compliance with approved scheme(s) of arrangements

The Company has not entered into any scheme of arrangement which has an accounting impact on current or previous financial year.

(vii) Utilisation of borrowed funds and share premium

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:

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

b. provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries

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

b. provide any guarantee, security or the like on behalf of the ultimate beneficiaries

(viii) Undisclosed income

There is no income surrendered or disclosed as income during the current or previous year in the tax assessments under the Income Tax Act, 1961, that has not been recorded in the books of account.

(ix) Details of crypto currency or virtual currency

The company has not traded or invested in crypto currency or virtual currency during the current or previous year.

(x) Valuation of PP&E and intangible asset

The company has not revalued its property, plant and equipment (including Right-of-Use assets) or intangible assets or both during the current or previous year.

xi) Title deeds of immovable properties not held in name of the company

Title deeds are held in the former name of the Company.

xii) Utilisation of borrowings availed from banks and financial institutions

The borrowings obtained by the company from banks and financial institutions have been applied for the purposes for which such loans were was taken

xiii) Registration of Charges or satisfaction with Registrar of Companies (ROC)

The company does not have any charge or satisfaction not registered with the ROC beyond the statutory period.

52 Core Investment Companies (CIC)

Management has assessed that there are three CIC in the Group (âCompanies in the Group'' is as defined in Master Direction - Core Investment Companies (Reserve Bank) Directions, 2016, as amended).

53 Previous Yearâs Figures

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

Mar 31, 2018

1. Employee Benefits

As per Ind AS âEmployee Benefitsâ (Ind AS - 19), the disclosures of Employee Benefits as defined in the Standard are given below:

1. Defined contribution plans

The Company makes contributions at a specified percentage of payroll cost towards Employees Provident Fund (EPF) for qualifying employees.

The Company has recognized the following amounts in the Statement of Profit & Loss.

2. Defined Benefit Plans

Gratuity is payable to all eligible employees of the company on superannuation, death and resignation in terms of the provision of the payment of Gratuity Act. The present value of obligations is determined based on actuarial valuation using Projected Unit Credit Method, which recognized each period of service as given rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

3. SEGMENT REPORTING

The Company operates in a single business segment i.e. manufacture of steel and steel products such as seamless tubes and rolled products and as such there are no primary and secondary segments as per the requirement of (Ind AS - 108) on âOperating Segmentâ. The Company has no reportable geographical segment. No single customer contributes more than 10% or more of total revenue.

4. RELATED PARTY DISCLOSURE Name of related party Relationship

Welspun Steel Limited Enterprise having significant influence over the Company

WS Alloy Holding Pvt. Ltd.(merged in Enterprise having significant influence over the Company (w.e.f.

Welspun Steel Limited w.e.f. 21ST August 2017) 9th May, 2015 and up to 21ST August 2017)

Rank Marketing LLP Enterprise having significant influence over the Company

Wide Screen Holding Pvt Ltd Enterprise having significant influence over the Company

MGN Agro Properties Pvt Ltd Enterprise having significant influence over the Company

((Krishiraj Trading Limited merged with MGN Agro Properties Pvt Ltd w.e.f. 27th September 2016)

Key Managerial Personnel

Anuj Burakia Whole Time Director

Narendra Bhandari Chief Finance Officer

Nilesh Javekar Company Secretary

Non-Executive Director

Atul Desai Non-Executive Director & Independent Director

Ashok Jain Non-Executive Director & Independent Director

Amita Karia Non-Executive Director & Independent Director

Hanuman Kanodia Non-Executive Director

Aneel Lasod Non-Executive Director (w.e.f. 14th February 2017)

V S Iyer Non-Executive Director (upto 12th January 2017)

38 Financial Instruments

Accounting Classification and Fair Value Measurements

The fair values of the financial assets and liabilities are included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

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

1. Fair value of cash and short-term deposits, trade and other short term receivables, trade payables, other current liabilities, short term loans from banks/financial institutions/others approximate their carrying amounts largely due to the short-term maturities of these instruments.

2. Financial instruments with fixed and variable interest rates are evaluated by the Company based on parameters such as interest rates and individual credit worthiness of the counterparty. Based on this evaluation, allowances are taken to account for the expected losses of these receivables.

The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:

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

Level 2: other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly.

Level 3: techniques which use inputs that have a significant effect on the recorded fair value that are not based on observable market data. (R_s. I_n L_acs)

6. Financial risk management objectives and policies

The risk management policies of the Company are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Companyâs activities.

The Management has overall responsibility for the establishment and oversight of the Companyâs risk management framework.

In performing its operating, investing and financing activities, the Company is exposed to the Credit risk, Liquidity risk and Market risk.

Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as equity price risk and commodity risk. Financial instruments affected by market risk include loans and borrowings, deposits and derivative financial instruments.

Credit risk on financial assets

Financial assets that are potentially subject to concentrations of credit risk and failures by counterparties to discharge their obligations in full or in a timely manner consist principally of cash balances with banks, cash equivalents and receivables, and other financial assets. The maximum exposure to credit risk is: the total of the fair value of the financial instruments and the full amount of any loan payable commitment at the end of the reporting year. Credit risk on cash balances with banks is limited because the counterparties are entities with acceptable credit ratings. Credit risk on other financial assets is limited because the other parties are entities with acceptable credit ratings.

As disclosed in Note 9, cash and cash equivalents balances generally represent short term deposits with a less than 90-day maturity.

As part of the process of setting customer credit limits, different credit terms are used. The average credit period generally granted to trade receivable customers is about 90-360 days. But some customers take a longer period to settle the amounts.

In the opinion of management, trade receivable, Financial assets, Cash and cash equivalent, Balance with Bank, Loans and other financial assets 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.

The Company has recognized Rs 135 Lacs towards any loss allowance as the Company expect that there is no credit loss on trade receivables.

7. Foreign currency risk

The Company has Sales and Purchase in foreign currency. Consequently, the Company is exposed to foreign exchange risk.

The company evaluates exchange rate exposure arising from foreign currency transactions and the company follows established risk management policies, including the use of derivatives like foreign exchange forward contracts to hedge exposure to foreign currency risk.

Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates.

Company has interest rate risk exposure mainly from changes in rate of interest on borrowing & on deposit with bank. The interest rate is disclosed in the respective notes to the financial statements of the Company. The following table analyse the breakdown of the financial assets and liabilities by type of interest rate: (_Rs . i_acs)

Liquidity risk

Liquidity risk is the risk that the Company may not be able to meet its present and future cash and collateral obligations without incurring unacceptable losses. The Companyâs objective is to, at all times maintain optimum levels of liquidity to meet its cash and collateral requirements. The Company closely monitors its liquidity position and deploys a robust cash management system. It maintains adequate sources of financing including debt and overdraft from banks at an optimized cost.

The Company maximum exposure to credit risk for the components of the balance sheet at 31 March 2018 and 31 March 2017 is the carrying amounts. The liquidity risk is managed on the basis of expected maturity dates of the financial liabilities. The average credit period taken to settle trade payables is about 90 days. The other payables are with short-term durations. The carrying amounts are assumed to be a reasonable approximation of fair value.

At present, the Company does expect to repay all liabilities at their contractual maturity. In order to meet such cash commitments, the operating activity is expected to generate sufficient cash inflows.

8. Capital management

For the purpose of the Companyâs capital management, capital includes issued equity capital, share premium and all other equity reserves attributable to the equity holders. The primary objective of the Companyâs capital management is to maximize the shareholder value.

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Companyâs policy is to keep optimum gearing ratio. The Company includes within net debt, interest bearing loans and borrowings, trade and other payables, less cash and cash equivalents. _{(Rs. In Lacs)}

9. First time adoption of IND AS

These are the Companyâs first financial statements prepared in accordance with Ind AS.

The Company has adopted Indian Accounting Standards (Ind AS) notified by the Ministry of Corporate Affairs with effect from 1st April, 2017, with a transition date of 1st April, 2016. Ind AS 101-First-time Adoption of Indian Accounting Standards requires that all Ind AS standards and interpretations that are issued and effective for the first Ind AS financial statements which is for the year ended 31st March, 2018 for the company, be applied retrospectively and consistently for all financial years presented. Consequently, in preparing these Ind AS financial statements, the Company has availed certain exemptions and complied with the mandatory exceptions provided in Ind AS 101, as explained below. The resulting difference in the carrying values of the assets and liabilities as at the transition date between the Ind AS and Previous GAAP have been recognized directly in equity (retained earnings or another appropriate category of equity).

Set out below are the Ind AS 101 optional exemptions availed as applicable and mandatory exceptions applied in the transition from previous GAAP to Ind AS.

A. Optional Exemptions availed (i) Deemed Cost

Ind AS 101 permits a first-time adopter to elect to continue with the carrying value for all of its property, plant and equipment and intangible assets covered by Ind AS 38 - Intangible Assets as recognized 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. Accordingly, the Company has elected to measure all of its property, plant and equipment and intangible assets at their previous GAAP carrying value.

B. Applicable mandatory exceptions

(i) Estimates

An entityâs estimates in accordance with Ind AS 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).

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 following items in accordance with Ind AS at the date of transition as these were not required under previous GAAP:

- Investment in equity instruments carried at FVPL or FVOCI;

- Investment in debt instruments carried at FVPL.â

(ii) Classification and measurements 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.

Transition to Ind AS -

Reconciliations

The following reconciliations provide the explanation and qualification of the differences arising from the transition from Previous GAAP to Ind AS in accordance with Ind AS 101 âFirst Time Adoption of Indian Accounting Standardsâ.

(i) Reconciliation of Total Equity: (Rs. In Lacs)

Notes to Equity reconciliations and statement of total comprehensive income reconciliation with previous GAAP

A Loan processing fees are recorded at amortized cost as per the fair value rate under Ind AS, carried at transaction value under previous GAAP

B Forward Contract are measured at Mark to market rate under Ind AS, forward contract measured at cost under previous GAAP

C Leasehold land is amortized basis the lease period starting from 16 Sep 1995. Amortization expenses till 01st April 2016 is reclass on 01st April 2016.

D Re-measurements gain or loss with regard to actuarial gains or losses on provision for gratuity to be recorded in Other comprehensive income under Ind AS.

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

Notes to first time adoption:

Note 10: Cumulative Redeemable preference shares

The Company has issued non-convertible redeemable preference shares. The preference shares carry fixed cumulative dividend which is non-discretionary. Under Indian GAAP, the preference shares were classified as equity and dividend payable thereon was treated as distribution of profit.

Under Ind AS, non-convertible redeemable preference shares are classified as financial liability as per Ind AS 32 and accounted at fair value. Interest on financial liability is recognized using the effective interest method.

Note 2: Reconciliation of cash flows

The Ind AS adjustments are either non cash adjustments or are regrouping among the cash flows from operating, investing and financing activities. Consequently, Ind AS adoption has no impact on the net cash flow for the year ended 31st March, 2016 as compared with the previous GAAP.

Note 3: Fair valuation of other financial instruments

Under Indian GAAP, interest free borrowing is initially measured at the transaction value at the time of initial measurement without any adjustments in regard to the fair value. Under Ind AS, interest free borrowings are to be initially measured at fair value. Subsequently these liabilities are measured at amortized cost.

Ind AS 109 requires transaction costs incurred towards origination of borrowings to be deducted from the carrying amount of borrowings on initial recognition. These costs are recognized
in the profit or loss over the tenure of the borrowing as part of the interest expense by applying the effective interest rate method. Under previous GAAP, these transaction costs were charged to profit or loss as and when incurred.

Under Indian GAAP, interest free security deposit given is measured at the transaction value at the time of initial measurement without any adjustments in regard to the fair value. Under Ind AS, interest free security deposit is to be initially measured at fair value. As at the date of transition, the interest free security deposit has been recognized at fair value based on the facts and circumstances which existed at the date of initial measurement by giving corresponding effect to retained earnings for the period from initial measurement to the date of transition and to other current assets (pre-paid expense) for the remaining period of deposit post the date of transition.

Note 11: Re-measurements of post-employment benefit obligations

Under Ind AS, re-measurements i.e. actuarial gains and losses and the return on plan assets, excluding amounts included in the net interest expense on the net defined benefit liability are recognized in other comprehensive income instead of profit or loss. Under the previous GAAP, these re-measurements were forming part of the profit or loss for the year.

Note 12: Deferred tax

Indian GAAP requires deferred tax accounting using the income statement approach, which focuses on differences between taxable profits and accounting profits for the period. Ind AS 12 requires entities to account for deferred taxes using the balance sheet approach, which focuses on temporary differences between the carrying amount of an asset or liability in the balance sheet and its tax base. The application of Ind AS 12 approach has resulted in recognition of deferred tax on new temporary differences which was not required under Indian GAAP.

In addition, the various transitional adjustments lead to temporary differences. According to the accounting policies, the Company has to account for such differences. Deferred tax adjustments are recognized in correlation to the underlying transaction either in retained earnings or a separate component of equity.

Note 13: Retained earnings

Retained earnings as at April 1, 2016 has been adjusted consequent to the above Ind AS transition adjustments.

Note 7: Other comprehensive income

Under Ind AS, all items of income and expense recognized in a period should be included in statement of profit and loss for the period, unless a standard requires or permits otherwise. Items of income and expense that are not recognized in statement of profit and loss but are shown in the statement of profit and loss as âOCIâ includes re-measurements of defined benefit plans. The concept of OCI did not exist under previous GAAP.

Note 14: Property, plant and equipment

The Company has adopted the exemption under Ind AS 101 and has considered previous GAAP carrying amount as the deemed cost for the Opening Balance sheet as at April 1, 2016. Accordingly the Gross block of each class of Property, plant and equipment has been netted off with their respective accumulated depreciation balances as at April 1, 2016 under Previous GAAP to arrive at the deemed cost for the purpose of opening Ind AS balance sheet.

15. PREVIOUS YEARâS FIGURES

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

Mar 31, 2016

c. Terms/ rights attached to Equity shares :

The Company has 108,435,840 equity share having par value of Rs 6/- each fully paid up. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends, if any, in Indian rupees. The dividend proposed if any, by the board of Directors is subject to the approval of the Shareholders in ensuing annual general meeting.

The CRPS carry dividend (cumulative) of 12% per annum. The CRPS 40,242,857 are redeemable with premium of Rs.25 per share in three equal annual installments payable from the end of eight years to ten years from the date of allotment (i.e.19th February 2013), The CRPS 4,285,714 are redeemable with premium of Rs.25 per share in three equal annual installments payable from the end of eight years to ten years from the date of allotment (i.e.11th February 2014),

The CRPS 6,375,700 are redeemable with premium of Rs.25 per share in three equal annual installments payable from the end of eight years to ten years from the date of allotment (i.e.11th November 2014) and

The CRPS 8,000,000 are redeemable with premium of Rs.25 per share in three equal annual installments payable from the end of eight years to ten years from the date of allotment (i.e.23rd October 2015).

Secured:

a) Rupee loan of Rs.29,604 lac (Previous year Rs. 18,078 lac) pari passu basis, by way of:

i. Equitable mortgage of immoveable properties on first charge basis.

ii. Hypothecation of movable fixed assets on first charge basis. iii Second charge on current assets.

Rupee loans carry interest at bank prime lending rate /base rate plus margin. Loans of

i. Rs.16,900 lac (Previous year Rs.16900 lac) are repayable in 30 quarterly installment starting from September 2016 and ending in April 2024.

ii. Rs.704 lac (Previous year Rs. 770 lac) are repayable in 20 quarterly installment starting from June 2014 and ending in March 2019.

Iii Rs Nil (Previous year Rs.408 lac) are repayable in quarterly installment starting from March 2012 and ending in June 2015.

Iv Rs.12,000 lac (Previous year Rs.Nil) are repayable in 32 quarterly installments starting from June 2017 and ending in August 2025.

b) Rupee Term loans include installment of Rs.13.5 lac (Previous Year Rupees.163 Lac) due on the balance sheet date. Unsecured:

a) Body Corporate Loan carries interest rate @ 10% p.a. is repayable immediately after the expiry of 36 Months from the date of agreement.

b) Sales Tax Deferred Loan is repayable from April 2015 in six equal annual installments.

Note: (a) In accordance with the provisions of schedule II of the Act. In case of fixed assets which have completed their useful life as at 1st April 2014 .the carrying value (net of residual value) amounting to Rs 2,898 lacs as a transitional provision has been recognized in the Retained Earning.

-Further in case of assets acquired prior to 1st April 2014, the carrying value of assets is depreciated over the useful life as determined effective 1st April 2014.

-Depreciation and amortization expenses for the year would have been higher by Rs.1061 Lac had the company continued with the previous assessment of useful life of such assets.

(b) During the Financial Year 2015-16 the management has re-assessed the estimated useful life of the Fixed Assets based on technical advice received from an independent technical consultant effective from 1st April 2015 and consequently revised the estimated useful lives of Plant and Machinery. This has resulted in the decrease of depreciation for the year by Rs. 541 lacs.

1. Exceptional Item

As per the Letter dated 9th October 2013 of Government of Gujarat to BIFR in connection with G.R.No: 102012-593970-

I, dated 8th July 2013, the Company is eligible to avail unutilized incentive. Accordingly during the year ended 31st March 2015, the Company had accounted for the refund on the purchase tax an amount of Rs. 2,259 lac net off Sales tax Liability Rs. 624 lac. Further during the year the company had accounted for Rs. 321 Lac over and above the purchase tax receivable shown in the previous year.

2 The slowdown in end user industries and overall global weakness continues to weigh on and is adversely impacting the performance. During the current year, the company has received Rs. 2800 lac from promoters/strategic investor and Consortium banks have disbursed loans, which has resulted in improved liquidity situation. Expected receipt of loan from Consortium Banks and Fiscal Incentive will also result in further improvement in the liquidity of the company. The value added products approved by major OEMâs will also result in increased demand of companyâs products. Management thus, expects substantial improvement in the utilization of the capacity in the coming period. Accordingly, the financial statements have been prepared on going concern basis and no adjustments are required to the carrying amount of assets and liabilities.

3. The balances of trade receivables and trade payables are subject to confirmation from the respective parties and consequential adjustments arising there from, if any. The management however does not expect any material variations on reconciliation.

4. In the opinion of the Board, 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, unless stated otherwise.

The provision for all known liabilities is adequate and not in excess of the amount reasonably stated.

5. SEGMENT REPORTING

The Company operates in a single business segment i.e. manufacture of steel and steel products such as seamless tubes androlled products and as such there are no primary and secondary segments as per the requirement of Accounting Standard (AS-17) on âSegment Reportingâ. The Company has no reportable geographical segment.

6. RELATED PARTY DISCLOSURE

As per Accounting Standard (AS) 18, âRelated Party Disclosures, prescribed under the Accounting Standard Rules, the disclosures of transactions with the related parties are given below:

Name of related party Relationship

- Shashank Chaturvedi Key Management Personnel (up to 11th November, 2014)

- Anuj Burakia Key Management Personnel (w.e.f 29th July, 2015)

- Welspun Steel Limited Enterprise under common control with the company

- W S Alloy Holding Pvt. Ltd. Enterprise having significant influence over the Company (w.e.f 9th May, 2015)

- Wide Screen Holding Pvt Ltd Enterprise having significant influence over the Company

- Krishiraj Trading Limited Enterprise under common control with the company

Above mentioned related parties are identified by the Management and relied upon by the Auditor.

Note: - In the absence of virtual certainty, Deferred Tax asset on account of unabsorbed depreciation and business loss has been recognized to the extent it can be realized against reversal of deferred tax liability.

7. EMPLOYEEBENEFITS a) Defined Contribution Plan

The Company makes contributions at a specified percentage of payroll cost towards Employees Provident Fund (EPF) for qualifying employees.

The Company recognized Rs.80 lac (Previous year Rs.85 lac) for provident fund contributions in the Statement of Profit and Loss.

b) Defined Benefit Plans

*The details of experience adjustments arising on account of plan assets and liabilities as required by paragraph 120(n)(ii) of AS 15 (Revised) on âEmployee Benefitsâ are not available in the valuation report and hence, are not furnished.

d) Other Long Term Employee Benefits

The compensated absences charge for the year ended 31st March, 2016, based on actuarial valuation carried out using the Projected Unit Credit Method, amounting to Rs.15 lac (Previous year Rs.16 lac) has been recognized in the Statement of Profit and Loss.

8. Disclosures relating to amounts payable as at the year end together with interest paid / payable to Micro, Small and Medium Enterprises have been made in the accounts, as required under Micro, Small and Medium Enterprises Development Act, 2006, (MSMEDA) to the extent of information available with the Company determined on the basis of intimation received from suppliers regarding their status. The required disclosures are the information required under the said Act as given below :

9. PREVIOUS YEARâS FIGURES

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

Mar 31, 2015

1 Exceptional Item

As per the Letter dated 9th October 2013 of Government of Gujarat to BIFR in connection with G.R.No: 102012-593970- I, dated 8th July 2013, the Company is eligible to avail unutilized incentive. Accordingly, the Company has exercised the option for remission of VAT/Sales tax. Accordingly, the Company has accounted an amount of Rs. 3,519 lac (including interest provided up to 31st March 2013 Rs 152 lac) towards the remission of VAT/Sales tax based on the above stated letter in the previous year.

Further, the company has received final certificate of Entitlement from Industries Commissioner and issuance of notification No. GHN Â 17 VAR Â 2015 (36) dated 18th May, 2015 by finance department of Gujarat. Accordingly, the company is entitled to the benefits available under the relevant scheme as provided in such eligibility certificate and the provision of aforesaid G.R shall mutatis mutandis apply in respect of such industrial unit. Accordingly, during the year the Company has accounted for the refund on the purchase tax for an amount of Rs. 2,259 lac net off Sales tax liability of Rs. 624 lacs.

2 The slowdown in end user industries and overall global weakness continues to weigh on and adversely impact the performance. Having consideration to the impending infusion of long term funds by promoter/strategic investor, proposed /sanctioned fresh loans from the lenders and the expected receipt of fiscal incentive will result in improvement in the liquidity of the company. The value added products approved by major OEM's will result in increased demand of company's products. Already, the Company has started receiving orders from Defence, Railways and Energy sectors. Management thus, expects substantial improvement in the utilisation of the capacity. Accordingly, the financial statements have been prepared on going concern basis and no adjustments are required to the carrying amount of assets and liabilities.

3 The balances of trade receivables and trade payables are subject to confirmation from the respective parties and consequential adjustments arising there from, if any. The management however does not expect any material variations on reconciliation.

4 In the opinion of the Board, current assets, loans andadvances 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, unless stated otherwise. The provision for all known liabilities is adequate and not in excess of the amount reasonably stated.

5 SEGMENT REPORTING

The Company operates in a single business segment i.e. manufacture of steel and steel products such as seamless tubes and rolled products and as such there are no primary and secondary segments as per the requirement of Accounting Standard (AS-17) on "Segment Reporting" as notified in the Companies (Accounting Standards) Rules 2006. The Company has no reportable geographical segment.

6 RELATED PARTY DISCLOSURE

As for Accounting Standard (AS Â 18) 'Related Party Disclosures', notified in the Companies (Accounting Standards) Rules 2006, the disclosures of transactions with the related parties as defined in the Standard are given below:

7 EMPLOYEE BENEFITS

a) Defined Contribution Plan

The Company makes contributions at a specified percentage of payroll cost towards Employees Provident Fund (EPF) for qualifying employees.

The Company recognized Rs.85 lac (Previous year Rs.95 lac) for provident fund contributions in the Statement of Profit and Loss.

b) Defined Benefit Plans

Gratuity is payable to all eligible employees of the company on superannuation, death and resignation in terms of the provision of the payment of Gratuity Act. The present value of obligations is determined based on actuarial valuation using Projected Unit Credit Method, which recognized each period of service as given rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

8 Disclosures relating to amounts payable as at the year end together with interest paid / payable to Micro, Small and Medium Enterprises have been made in the accounts, as required under Micro, Small and Medium Enterprises Development Act, 2006, (MSMEDA) to the extent of information available with the Company determined on the basis of intimation received from suppliers regarding their status.The required disclosures are the information required under thesaid Act as given below :

9 PREVIOUS YEAR'S FIGURES

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

Mar 31, 2014

1 a. Terms/ rights attached to Equity shares :

The Company has 108,435,840 equity share having par value of Rs 6/- each fully paid up. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends, if any, in indian rupees. The dividend proposed if any, by the board of Directors is subject to the approval of the Shareholders in 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 share holders.

Preference Share :

The CRPS carry dividend (cumulative) of 12% per annum. The CRPS 40,242,857 are redeemable with premium of Rs.25 per share in three equal annual installments payable from the end of eight years to ten years from 19th February 2013, the date of allotment and The CRPS 4,285,714 are redeemable with premium of Rs.25 per share in three equal annual installments payable from the end of eight years to ten years from 11th February 2014, the date of allotment.

2. The share application money is received against proposed issue of 6,376,000 CRPS of Rs.10 each at a premium of Rs.25 per share carrying dividend (cumulative) of 12% per annum. The shares shall be allotted after approval from shareholders. The CRPS shall be redeemable with premium of Rs.25 per share in three equal annual installments payable from the end of eight years to ten years from the date of allotment.

a) Rupee loan of Rs.17,215 lac (Previous year Rs. 15,444 lac) pari passu basis, by way of:

i. Equitable mortgage of immoveable properties on first charge basis.

ii. Hypothecation of movable fixed assets on first charge basis.

iii. Second charge on current assets.

Rupee loans carry interest at bank prime lending rate /base rate plus margin. Loans of

i. Rs.15,400 lac are repayable in 30 quarterly installment starting from September 2016 and ending in April 2024.

ii. Rs.800 lac are repayable in 20 quarterly installment starting from June 2014 and ending in March 2019.

iii. Rs.1015 lac are repayable in quarterly installments starting from March 2012 and ending in June 2015.

b) Sales Tax Deferred Loan is repayable from April 2012 in six equal yearly installments. The payment of the sales tax installment due of Rs.673 lac due been stayed/kept in abeyance/put on hold/ by the Board for Industrial and Financial Reconstruction (BIFR) as modifications in the scheme of rehabilitation proposed by the company are under consideration.

c) Rupee Term loans include installment of Rs.150 lac (Previous Year Rupees. 141 Lac) due on the balance sheet date.

3. a) Working Capital Loans are secured, on pari passu basis, by way of

i. Hypothecation of current assets on first charge basis.

ii. Hypothecation of movable fixed assets on second charge basis.

iii) Equitable mortgage of immovable properties on second charge basis

b) Working Capital Loans carry interest, at bank prime lending rate/base rate plus margin, ranging from 11.50% to 14.75%.

c) Buyers Credit carry interest at LIBOR plus margin (65 bps to 125 bps).

4. Exceptional Item

As per the Letter dated 9th October 2013 of Government of Gujarat to BIFR in connection with G.R.No: 102012-593970- I, the Company is eligible to avail unutilized incentive. Accordingly, the Company has exercised the option for remission of VAT/Sales tax and refund on purchase tax. Accordingly, the Company has accounted an amount of Rs. 3,519 lac (including interest provided up to 31st March 2014 Rs 152 lac) towards the remission of VAT/Sales tax based on the above stated letter. However, the Company has not accounted for the refund on the purchase tax, and same will be accounted as per assessment by the authority.

5. The prolonged slowdown in end user industries and weak business sentiment continue to weigh on and adversely impact the performance. However, operating performance of the Company has been improved as compared to previous year. The management has taken steps to reduce the finance cost by infusing fresh share capital, reduction in the rate of interest on borrowings from the bankers and extension of fiscal incentives eligibility which will result into reduction of finance cost and also improve liquidity of the company. Further, it is expected that demand from auto motive, infrastructure and engineering industry will see a pickup from the multiyear lows during the year, resulting in increased demand for company''s products. Management expects substantial improvement in utilisation of capacity. Accordingly, the financial statements have been prepared on going concern basis and no adjustments are required to the carrying amount of assets and liabilities.

6. The balances oftrade receivables and trade payables are subject to confirmation from the respective parties and consequential adjustments arising there from, if any. The management however does not expect any material variations on reconciliation.

7. In the opinion of the Board, 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, unless stated otherwise. The provision for all known liabilities is adequate and not in excess of the amount reasonably stated.

8. SEGMENT REPORTING

The Company operates in a single business segment i.e. manufacture of steel and steel products such as seamless tubes and rolled products and as such there are no primary and secondary segments as per the requirement of Accounting Standard (AS-17) on "Segment Reporting" as notified in the Companies (Accounting Standards) Rules 2006. The Company has no reportable geographical segment.

Note: - In the absence of virtual certainty, Deferred Tax asset on account of unabsorbed depreciation and business loss has been recognized to the extent it can be realized against reversal of deferred tax liability.

9. EMPLOYEE BENEFITS

a) Defined Contribution Plan

The Company makes contributions at a specified percentage of payroll cost towards Employees Provident Fund (EPF) for qualifying employees.

The Company recognized Rs.95 lac (Previous year Rs.149 lac) for provident fund contributions in the Statement of Profit and Loss.

b) Defined Benefit Plans

Gratuity is payable to all eligible employees of the company on superannuation, death and resignation in terms of the provision of the payment of Gratuity Act. The present value of obligations is determined based on actuarial valuation using Projected Unit Credit Method, which recognized each period of service as given rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

* The details of experience adjustments arising on account of plan assets and liabilities as required by paragraph 120(n)(ii) of AS 15 (Revised) on "Employee Benefits" are not available in the valuation report and hence, are not furnished.

C) Other Long Term Employee Benefits

The compensated absences charge for the year ended 31st March, 2014, based on actuarial valuation carried out using the Projected Unit Credit Method, amounting to Rs.14 lac (Previous year Rs.14 lac) has been recognized in the Statement of Profit and Loss.

As at 31st March

2014 2013

10. Contingent Liability

Capital Commitments not provided for (net of advances) 23 23

Bank Guarantees 1035 1,104

Bills Discounted 561 1,177

Service Tax 184 119

Excise Duty 34 34

Disputed Sales Tax Demands 48 49

Disputed Income Tax Demand 86 86

Claim against the Company not acknowledged as debts 153 73

Dividend on Cumulative Redeemable Preference Shares (CRPS) 544 54

11. Pursuant to resolution passed in the shareholders'' meeting held on 14th May, 2013,name of company be and is hereby changed from Remi Metals Gujarat Limited to RMG Alloy Steel Limited . The approval from Central Government/Registrar of Companies is received on 31st May, 2013.

12. PREVIOUS YEAR''S FIGURES

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

Mar 31, 2013

1. Losses incurred in the financial year due to sharp slowdown in the industry, increased finance costs and volatility in foreign exchange movements have further eroded the net worth. The proposed modification in the scheme of rehabilitation which includes capital expenditure plans (majority funds tied up with banks), infusion of capital, monetization of surplus assets and other mitigating factors is pending for approval before the BIFR. Together with rationalisation of operations, release & mobilisation of additional long term funds already done, the Company expects to achieve earnings recovery to recoup its recent operative losses and as such financial statements have been prepared on going concern basis and no adjustment is required to the carrying amount of assets and liabilities.

2. The balances of trade receivables and trade payables are subject to confirmation from the respective parties and consequential adjustments arising there from, if any. The management however does not expect any material variations on reconciliation.

3. In the opinion of the Board, 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, unless stated otherwise. The provision for all known liabilities is adequate and not in excess of the amount reasonably stated.

4. SEGMENT REPORTING

The Company operates in a single business segment i.e. manufacture of steel and steel products such as seamless tubes and rolled products and as such there are no primary and secondary segments as per the requirement of Accounting Standard (AS-17) on "Segment Reporting" as notified in the Companies (Accounting Standards) Rules 2006. The Company has no reportable geographical segment.

5. The remuneration paid to the Executive Director is subject to approval of shareholders and Central Government. Application made in this respect is pending with the Central Government.

6. EMPLOYEE BENEFITS

a) Defined Contribution Plan

The Company makes contributions at a specified percentage of payroll cost towards Employees Provident Fund (EPF) for qualifying employees.

The Company recognized Rs.149 lac (Previous year Rs.171 lac) for provident fund contributions in the Statement of Profit and Loss.

b) Defined Benefit Plans

Gratuity is payable to all eligible employees of the company on superannuation, death and resignation in terms of the provision of the payment of Gratuity Act. The present value of obligations is determined based on actuarial valuation using Projected Unit Credit Method, which recognized each period of service as given rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

As at 31st March

2013 2012 f) Contingent liability

Capital commitments not provided for (net of advances) 23 23

Bank guarantees 1,104 1,354

Bills discounted 1,177 2,301

Service tax 119 130

Excise duty 34 34

Disputed sales tax demands 49 44

Disputed Income tax demand 86 86

Claim against the Company not acknowledged as debts 73 73

Dividend on cumulative redeemable preference shares (CRPS) 54 -

7. Name of the company is proposed to be changed to RMG Alloy Steel Limited pursuant to resolution passed in the shareholders'' meeting held on 14th May, 2013. The approval from Central Government/Registrar of Companies is awaited.

8. PREVIOUS YEAR''S FIGURES

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

Mar 31, 2012

A. Terms/ rights attached to equity shares

The company has 108,435,840 equity share having par value of Rs 6/- each fully paid up. Each holder of equity shares is entitled to one vote per share. The company declares and pays dividends, if any, in indian rupees. The dividend proposed if any, by the board of directors is subject to the approval of the shareholders in 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 share holders.

a) Rupee loan of Rs.7,860 lac (Previous year Rs.7,700 lac) and Foreign Currency loan of Rs.2,164 lac (Previous year Rs.3,748 lac)are secured, on pari passu basis, by way of:

i. Equitable mortgage of fixed assets on first charge basis.

ii. Hypothecation of movable machinery on first charge basis.

iii. Second charge on current assets.

Foreign Currency loan carries interest at LIBOR plus bank margin and is repayable in 10 quarterly installments starting from March 13 and ending in June 15.

Rupee term loans of Rs.3,360 lac carry interest at bank prime lending rate /base rate plus margin and are repayable in 20 quarterly installment starting from September 2010 and ending in September 2015.

Rupee term loans of Rs.4,500 lac carry interest at base rate plus margin and are repayable in single bullet payment/installment at the end of 36 months from the date of drawdown, i.e. December, 2012.

b) Sales tax deferment loan is interest free and is repayable from April 2012 in six equal yearly installments.

c) Loan from body corporate carry nil interest till the Company is deregistered from BIFR and is repayable after March 2013 on mutually agreed terms.

d) Installments of rupee term loans aggregating to Rs.390 lac due have been paid after the balance sheet date. The rephasement proposal has been sanctioned by major lender in the consortium and is under advanced consideration by other member banks. Post the sanction by all, amount remitted over and above the installment as per revised schedule is to be adjusted against the dues arising in future.

a) Working Capital Loans are secured, on pari passu basis, by way of

i. Hypothecation of current assets on first charge basis.

ii. Hypothecation of movable machinery on second charge basis.

iii. Equitable mortgage of fixed assets on second charge basis.

b) Working Capital Loans carry interest, at bank prime lending rate/base rate plus margin, ranging from 13.50% to 15.15%.

c) Rupee loan is secured by second pari passu charge on immoveable properties of the company. It carries interest at 13.15%.

d) Buyers Credit carry interest at LIBOR plus margin (115 bps to 250 bps).

1. The balances of Trade receivables and Trade payables are subject to confirmation from the respective parties and consequential adjustments arising there from, if any. The management however does not expect any material variations on reconciliation.

2 In the opinion of the Board, 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, unless stated otherwise. The provision for all known liabilities is adequate and not in excess of the amount reasonably stated.

3. SEGMENT REPORTING

The Company operates in a single business segment i.e. manufacture of steel and steel products such as seamless tubes and rolled products and as such there are no primary and secondary segments as per the requirement of Accounting Standard (AS-17) on "Segment Reporting" as notified in the Companies (Accounting Standards) Rules 2006. The Company has no reportable geographical segment.

4. EMPLOYEE BENEFITS a) Defined Contribution Plan

The Company makes contributions at a specified percentage of payroll cost towards Employees Provident Fund (EPF) for qualifying employees.

The Company recognized Rs.171 lac (Previous year Rs.184 lac) for provident fund contributions in the Statement of Profit and Loss.

b) Defined Benefit Plans

Gratuity is payable to all eligible employees of the company on superannuation, death and resignation in terms of the provision of the payment of Gratuity Act. The present value of obligations is determined based on actuarial valuation using Projected Unit Credit Method, which recognized each period of service as given rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

The following table sets out the status of the gratuity plan and the amounts recognized in the company's financial statements as at 31st March, 2012:

d) Other Long Term Employee Benefits

The Leave encashment charge for the year ended 31st March, 2012, based on actuarial valuation carried out using the Projected Unit Credit Method, amounting to Rs.28 lac (Previous year Rs.38 lac) has been recognized in the Statement of Profit and Loss.

5. PREVIOUS YEAR'S FIGURES

The Revised Schedule VI has become effective from 1st April, 2011 for the preparation of Financial Statements. This has significantly impacted the disclosure and presentation made in the Financial Statements. Previous year figures have been regrouped/ reclassified wherever necessary to correspond with the current year's classification/disclosure.

Mar 31, 2010

1. In pursuance to the approved rehabilitation scheme, the Company has written back Rs. Nil (previous year Rs.474 lac) and Rs.Nil (previous year Rs.665 lac) as waiver of principal and interest including funded interest term loan respectively on receipt of sanction from the remaining Secured Lender vide letter dated January 5, 2009.

The equity share capital was reduced by 90% amounting to Rs.6805 lac in the previous year and the same was adjusted against brought forward losses.

The equity share capital of the Company is increased on conversion of optionally convertible preference shares of Rs.30 crores into 5,00,00,000 equity shares of Rs.6 each pursuant to the scheme.

2. The rehabilitation scheme has been implemented with the raising of long term funds and utilization thereof for capital expenditure and other purposes as envisaged. The Company has also tied up working capital funds during the year.

With additional facilities, balancing equipments for debottlenecking and outsourcing, the product mix is widened to enhance productivity and profitability. The management is continuously taking initiatives directed towards wider/richer product mix and improving operating margin.

The Management is hopeful of improved performance in the coming year. In view of the foregoing, the accounts have been prepared on a going concern basis despite the fact that the Companys accumulated losses exceed its net worth.

3. With effect from April 1, 2009 the Company has implemented SAP R3 as ERP platform and accordingly valuation of inventories of raw materials and stores and spares is done on the basis of weighted average price method instead of first in first out basis applied in earlier years. The impact on the loss due to this change is not material.

4. CAPITAL EXPENDITURE PLAN

The Company, as envisaged in the approved modified rehabilitation scheme, has undertaken capital expenditure programme. The programme involves acquisition of new machineries, balancing equipments, complete revamping and modernization of existing plant facilities.

i) Pre-operative expenses including (net expenditure during trial run of Rs.Nil) of Rs.517 lac during the year (previous year Rs.302 lac) in respect of assets capitalized during the year has has been allocated to the direct cost of the respective assets.

5. The balances of Sundry Debtors and Sundry Creditors- are subject to confirmation from the respective parties and consequential adjustments arising there from, if any. The management however does not expect any material variations on reconciliation.

6. In the opinion of the Board, 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, unless stated otherwise. The provision for all known liabilities is adequate and not in excess of the amount reasonably stated.

7. SEGMENT REPORTING

The Company operates in a single business segment i.e. manufacture of steel and steel products such as seamless tubes and rolled products and as such theFe are no primary and secondary segments as per the requirement of Accounting Standard (AS-17) on "Segment Reporting" as notified in the Companies (Accounting Standards) Rules 2006. The Company has no reportable geographical segment.

8. RELATED PARTY DISCLOSURE

As for Accounting Standard (AS - 18) Related Party Disclosures, notified in the Companies (Accounting Standards) Rules 2006, the disclosures of transactions

9. In terms of Accounting Standard 22 issued by ICAI, in respect of "Accounting of Taxes on Income" the company has computed deferred tax asset amounting to Rs.12138 lac (previous year Rs. 10864 lac) on account of carried forward losses and disallowances and the deferred tax liability amounting to Rs.3407 lac (previous year Rs.3058lac). The net deferred tax assets amounting to Rs.8731 lac (previous year Rs.7806 lac) has not been recognized as a matter of prudence.

10. EMPLOYEE BENEFITS

a) Defined Contribution Plan

The Company makes contributions at a specified percentage of payroll cost towards Employees Provident Fund (EPF) for qualifying employees.

The Company recognized Rs.141 lac (previous year Rs.107 lac) for provident fund contributions in the profit and loss account.

b) Defined Benefit Plans

Gratuity payable to all eligible employees of the company on superannuation, death and resignation in terms of the provision of the payment of Gratuity Act. The present value of obligations is determined based on actuarial valuation using Projected Unit Credit Method, which recognized each period of service as given rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

d) Other Long Term Employee Benefits

The Leave encashment charge for the year ended 31st March, 2010, based on actuarial valuation carried out using the Projected Accrued Benefit Method, amounting to Rs.52 lac (previous year Rs.54 lac) has been recognized in the Profit and Loss Account.

11. FINANCIAL AND DERIVATIVE INSTRUMENTS

The forward exchange to hedge the foreign currency exposure for payments to be made against foreign currency loan is Rs.3488.73 lac equivalent to USD 77.70 lac (previous year nil).

The foreign currency exposure, that have not been hedged by any derivative instrument or otherwise, related to current liabilities as on 31st March, 2010 is Rs.383.79 lac, equivalent to USD 8.44 lac and Euro 0.06 lac (previous year Rs.1091.13 lac equivalent to USD 20.52 lac and Euro 0.75 lac).

12. ADDITIONAL INFORMATION

Pursuant to the provisions of paras 3 and 4 of Part II of Schedule VI to the Companies Act, 1956:

f) Contingent Liability Year Ended Year Ended

31.03.2010 31.03.2009 a) Estimated amount of

unexecuted contracts

on Capital A/c not provided

for (net of advances) 283 2371

b) Bank Guarantee 387 223

c) Bill Discounting 230 637

d) Others 4 4 e) Cumulative Preference

Share Dividend - 1

f) Sales tax 20 -

13. Disclosures relating to amounts payable as at the year end together with interest paid / payable to Micro, Small and Medium Enterprises have been made in the accounts, as required under Micro, Small and Medium Enterprises Development Act, 2006, (MSMEDA) to the extent of information available with the Company determined on the basis of intimation received from suppliers regarding their status and the required disclosures are the information required under the said Act could not be compiled and discloses are given below.

14. Previous year figures have been rearranged and regrouped, wherever necessary.

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