NOTES TO FINANCIAL ACCOUNT

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

(Amount Rs. in Lakhs)

45. Contingent liabilities :

(1) Claims against the Company not acknowledged as debts

Note:

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

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

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

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

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

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

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

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

B) OTHER EQUITY

Reconciliation of Other Equity as at 1st April 2016

(Amount Rs In Lakhs)

Reconciliation of Other Equity as at 31st March 2017

(Amount Rs In Lakhs)

Notes to first time adoption

a Property Plant and Equipment

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

b Re-Classification

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

c Prior Period Items

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

d Excise Duty

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

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

e Deferred Tax

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

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

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

53-A TAX RECONCILIATION

Income taxes recognised In Statement of Profit and Loss

Tax reconciliation

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

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

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

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

Components of deferred tax assets and liabilities

(Amount Rs in Lakhs)