1 Corporate information

Rajkumar Forge Ltd. is a public company domiciled in India and is incorporated under the provisions of the Companies Act, 1956. Its shares are listed on one recognised stock exchange in India i.e BSE.

The Company is engaged in the business of manufacturing and selling open die forgings in both domestic and international markets.

The financial statements were authorised for issue in accordance with a resolution of the directors on May 26, 2018. All press releases, financial reports and other information are available at our investor relations section on the Company's website: www.rkforging.com

2 Basis of preparation and compliance with Ind AS

i These Ind AS financial statements have been presented in accordance with the provisions of Division II of Schedule III to the Companies Act, 2013.

ii These Ind AS financial statements are prepared under the historical cost convention, unless required / permitted otherwise by applicable Ind AS.

iii As required by Section 128(1) of the Companies Act, 2013 (“the Act”) these financial statements are prepared in accordance with the accrual method of accounting with revenues recognized and expenses accounted on their accrual including provisions / adjustments for committed obligations and amounts determined as payable or receivable during the period.

iv Date of adoption of Ind AS: The equity shares of Rajkumar Forge Ltd. are listed on recognized stock exchanges in India and the net worth of the Company as per the audited balance sheet as at March 31, 2014 & as at March 31, 2015 was less than ' 500 crores. Hence as per Rule 4(1)(iii)(a) of the Companies (Indian Accounting Standards) Rules, 2015, the Company shall comply with the Indian Accounting Standards (Ind AS) for the accounting periods beginning on April 1, 2017, with the comparatives for the periods ending on March 31, 2018. Hence, the date of adoption of IND AS for the Company is April 1, 2017.

v Date of transition to Ind AS: Since the date of adoption of Ind AS is April 1, 2017, the date of transition to Ind AS is April 1, 2016. Hence, the notes to the First Ind AS compliant Financial Statements must include -

a Reconciliation of the IGAAP compliant Balance Sheet as at March 31, 2016 with the Ind AS compliant Balance Sheet as at April 1, 2016;

b Reconciliation of the IGAAP compliant Balance Sheet as at March 31, 2017 with the Ind AS compliant Balance Sheet as at March 31, 2017;

c Reconciliation of the IGAAP compliant P/L Statement for FY 2016-17 with the Ind AS compliant P/L Statement for FY 2016-17.

vi For the financial years ended March 31, 2018. and March 31, 2017, the Company prepared its financial statements in accordance with the accounting standards notified u/s 133 of the Act, read together with Rule 7 of the Companies (Accounts) Rules, 2014 (Indian GAAP). These IGAAP financial statements were approved by the Board of Directors of the Company on May 13, 2016 and May 29, 2017 respectively. The Ind AS financial statements of the Company for the year ended March 31, 2018. are the first financial statements the Company has to prepare in accordance with Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015.

vii Accordingly, the Company has prepared financial statements which comply in all material respects with the relevant provisions of the Act and with the Ind AS applicable for periods ending on March 31, 2018, together with the comparative period data as at and for the year ended March 31, 2017. In preparing these financial statements, the Company's opening balance sheet has been prepared as at April 1, 2016 which is the Company's date of transition to Ind AS.

viii The Company has followed the provisions of Ind AS 101-“First Time adoption of Indian Accounting Standards” (Ind AS 101), in preparing its opening Ind AS Balance Sheet as of the date of transition, i.e. April 1, 2016. In accordance with Ind AS 101, the Company has presented reconciliations of Shareholders' equity under Previous GAAP and Ind ASs as at March 31, 2017 and April 1, 2016 and of the Profit/ (Loss) after Tax as per Previous GAAP and Total Comprehensive Income under Ind AS for the year ended March 31, 2017.

ix The preparation of financial statements in conformity with Indian AS requires the management to make judgements, estimates and assumptions, that affect the application of accounting policies and the reported amounts of assets and liabilities and disclosures of contingent liabilities at the date of the end of the reporting periods and the reported amounts of revenues and expenses for the reporting periods. Although these estimates are based on the management's best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of assets or liabilities in future periods. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the year in which the estimate is revised.

x Ind AS Financial Statements for FY 2017-18: Ind AS 101 requires that an entity's first Ind AS financial statements shall include at least three balance sheets, two statements of profit and loss, two statements of cash flows and two statements of changes in equity and related notes, including comparative information for all statements presented. Accordingly, the first Ind AS financial statements of the Company will be as follows:

a Balance sheet as at March 31, 2018;

b Balance sheet as at March 31, 2017;

c Balance sheet as at April 1, 2016;

d Profit and Loss Statement for the year ended March 31, 2018;

e Profit and Loss Statement for the year ended March 31, 2017;

f Cash Flow Statement for the year ended March 31, 2018;

g Cash Flow Statement for the year ended March 31, 2017;

h Statement of changes in equity for the year ended March 31, 2018;

i . Statement of changes in equity for the year ended March 31, 2017;

j Statement of changes in equity as at April 1, 2016;

k Notes to Financial Statements.

Notes

3.1 The Company has not, during all the years, acquired any intangible assets under a financial lease.

3.2 The Company has not, during all the years, acquired any intangible assets through business combinations.

3.3 The Company has not, during all the years, impaired any intangible assets nor reversed any past impairment.

3.4 There are no additions to intangible assets, during all years, on account of exchange differences.

3.5 There are no additions to intangible assets, during all years, on account of revaluation.

3.6 There are no disposals of intangible assets, during all years, on account of discontinued operations.

3.7 None of the intangible assets have indefinite life.

4.1 Loans are non-derivative financial assets which generate a fixed or variable interest income for the Company. The carrying value may be affected by changes in the credit risk of the counterparties.

5.1 Loans and receivables are non-derivative financial assets which generate a fixed or variable interest income for the Company. The carrying value may be affected by changes in the credit risk of the counterparties.

5.2 Trade receivables are non-interest-bearing.

Total cash and cash equivalents

Notes

6.1 Cash at banks earns interest at floating rates based on daily bank deposit rates. Short-term deposits are made for varying periods of between one day and three months, depending on the immediate cash requirements of the Company, and earn interest at the respective short-term deposit rates.

6.2 The Company has pledged a part of its short-term deposits to fulfil collateral requirements.

7.1 Loans are non-derivative financial assets which generate a fixed or variable interest income for the Company. The carrying value may be affected by changes in the credit risk of the counterparties.

8.1 Terms/ rights attached to equity shares

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

The Company does not have any shares reserved for issue under options.

During the year under review, the Company has transferred 534,300 equity shares to the Investor Education & Protection Fund.

9.1 The Company has not made any cash / non-cash distribution to its shares holders during all the years.

9.2 Short term borrowings for working capital requirments availed by the company in the nature of cash credit facility, post shipment demand loan and buyers credit are secured by way of hypothecation of the company's stocks and book debts, both present and future and also secured by charge on company's immovable properties, both present and future, and personal guarantee by the promoters of the company Mr. A.K. Jindal and of Mr. K.B. Jindal and corporate guarantee of the holding company Western India Forgings Private Limited. The cash credit is repayable on demand and carries interest rate ranging from 9.50% to 10%.

10. Disclosure for assets taken on lease as per Ind AS 17:

The Company had entered into a commercial lease agreement for taking office space on lease. The lease agreement was for a period of 33 months with renewal option and escalation clauses. There were no restrictions placed upon the Company by entering into this lease. The Company had not given any sub-lease during the year. The lease arrangement did not include a non-cancellable period. Accordingly the lease was terminated during the year FY 2016-17.