NOTE 1 - CORPORATE INFORMATION

Narayani Steel Limited (“the Company”) is a public company domiciled in India and incorporated under the provisions of the Companies Act, 1956. The company is primarily engaged in the manufacture and sale of TMT bars, Rounds, Squares, Angles, etc. and trading of Billets, Blooms, Ingots, Iron ores, etc.

a) Terms/Rights attached to equity shares

The Company has only one class of equity shares having a par value of Rs.10/- per share. Each holder of equity shares is entitled to one vote per share.

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 amount. The distribution will be in proportion to the number of equity shares held by the share holders.

(A) Terms of Repayment

(i) Unsecured Loan

Unsecured Loans from Bodies Corporate, partly bearing interest, have been taken without any stipulation for repayment and are stated by the management to be in the nature of Long term borrowings.

(ii) Loan Against Vehicles :

a) Details of security

Loans against Vehicles is secured by way of hypothecation of the underlying asset financed.

b) Terms of Repayment

Loans against vehicles is repayable by way of Equated Monthly Installments (EMI), the particulars of which are as follows:

(a) Working Capital Loans are primarily secured by way of hypothecation of Stocks and Book Debts. The rate of interest on Cash Credit from Union Bank of India is 11.60% 2% (on additional adhoc limit of Rs. 5 crores) linked to the MCLR of Union Bank of India.

The loan is also collaterally secured by way of a) charge on Plant & Machinery, office premises, flats and plots in the name of the Company, b) charge on certain immovable properties of the Company, Mr. Sunil Kumar Choudhary, Mrs. Savitri Devi Choudhary, Mrs. Bina Choudhary, Mr. Kishan Lal Choudhary and Narayani Ispat Ltd. c) FDR of Rs 29.00 lacs in the name of the Company. d) Personal guarantees of Mr. Sunil Choudhary, Mr. Kishan Lal Choudhary, Mr. Bivor Bagaria, Mrs. Bina Choudhary, Mrs. Savitri Devi Choudhary and e) Corporate Guarantee from Narayani Ispat Ltd. and Cooltex Merchandise Pvt. Ltd.

(b) 1. Channel Financing from Andhra Bank of Rs. 10 crores is collaterally secured by Fixed Deposit of Rs 2,50,00,000/- and guaranteed by Mr. Sunil Kumar Choudhary and Mr. Kishan Lal Choudhary. The rate of interest on Channel Financing is 9.10% p.a. (Base Rate 0.50)%.

2. Channel Financing from Yes Bank of Rs. 3 Crores is collaterally secured by Fixed Deposit of Rs 60,00,000/- and guaranteed by Mr. Sunil Choudhary, Mr. Kishan Lal Choudhary, Mrs. Bina Choudhary and Mrs. Savitri Devi Choudhary. The rate of interest on Channel Financing is 11.25% (MCLR 2.15)%.

3. Channel Financing from Tata Capital Financial Services Limited of Rs. 10 Crores and an additional limit of Rs. 3 crore is guaranteed by Mr. Sunil Choudhary, Mr. Kishan Lal Choudhary, Mrs. Bina Choudhary & Mrs. Savitri Devi Choudhary. The rate of interest on Channel Financing is 10.75%.

4. Channel Financing from ICICI Bank Limited of Rs. 9.5 Crores is collaterally secured by Fixed Deposit of Rs 1,12,50,000/and guaranteed by Mr. Sunil Choudhary, Mr. Kishan Lal Choudhary, Mrs. Bina Choudhary, Mrs. Savitri Devi Choudhary and Mr. Bivor Bagaria. The rate of interest on Channel Financing is 9.50% (Base rate 1.35)%.

5. Channel Financing from Axis Bank Limited of Rs. 5 Crores is guaranteed by Mr. Sunil Kumar Choudhary, Mr. Kishan Lal Choudhary, Mrs. Bina Choudhary and Mr. Bivor Bagaria. The rate of interest on Channel Financing is 9.50% (MCLR3 1.50)%.

Trade Payables (Due to Others) include Rs. 56,39,588/- (P.Y. Nil /-) due from Private Companies in which Director is a There is no amount that needs to be disclosed pertaining to micro and small enterprises under Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act, 2006).

As at 31 March 2018, no supplier has intimated the Company about its status as micro or small enterprises or its registration with appropriate authority under Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act, 2006).

(a) Fixed Deposit of Rs. 2,50,00,000 /-(P.Y. Rs. 2,50,00,000) is pledged with Andhra Bank as collateral security for Channel Finance limit of Rs 10,00,00,000/-.

(b) Fixed Deposit of Rs. 60,00,000/- (P.Y. Rs.60,00,000) is pledged with Yes Bank as collateral security for Channel Finance

(c) Fixed Deposit of Rs. 1,12,50,000/- (P.Y. Rs. 1,12,50,000) is pledged with ICICI Bank as collateral security for Channel Finance limit of Rs 9,50,00,000/-.

(d) Other Fixed Deposits of Rs. 10,46,31,680/- ( P.Y. Rs. 11,32,22,119/-) are pledged with Union Bank of India as margin/ collateral security for sanction of credit facilities.

NOTE 6 - EMPLOYEE BENEFITS

Disclosure pursuant to Accounting Standard- 15 (Revised) “ Employee Benefits” :

The present value of obligation is determined based on the actuarial valuation using the Projected Unit Credit Method as on 31st March, 2018 which recognises each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

NOTE 7 - RELATED PARTY DISCLOSURE

i) Name of the related parties where control exists irrespective of whether transactions have occurred or not - None

ii) Names of the other related parties with whom transactions have taken place during the year:

(a) Key Managerial Personnel (Directors) Sunil Choudhary

Bina Choudhary Bivor Bagaria

(b) Relatives of Key Managerial Personnel Anjani Choudhary

(c) Associates Hari Equipments Private Limited

(d) Enterprises owned or significantly influenced Narayani Ispat Limited

by the Key Managerial Personnel or their relatives Kedarnath Commotrade Private Limited

Balajee Roadways

Agrimony Tradex Vyaappar Private Limited Hemang Steel Traders

NOTE 8 - CAPITAL WORK IN PROGRESS

Capital Work-in-Progress includes Rs.74,08,742/- (P.Y. Rs. Nil /-) towards expenses incurred on Plant & Equipments for increase in efficiency of the Manufacturing Unit, pending completion and installation thereof and Rs. 1,71,000 /- (P.Y. Rs. Nil /-) towards expenses incurred on development of a mobile based application software, pending completion thereof.

NOTE 9 - EXCEPTIONAL ITEM

Exceptional Item represents payments to certain employees of Vizianagaram unit on settlement of their dues on retrenchment.

NOTE 10

In the opinion of the Board of Directors, the Current Assets, Loans & Advances have a value on realisation in the ordinary course of business at least equal to the amount at which they are stated in the accounts. Adequate provisions have been made for all known losses and liabilities.

NOTE 11

Certain balances of Trade Payables, Trade Receivables, Unsecured Loans and Advances are subject to confirmation. Debtors is net off Rs. 18,42,689/- (P.Y. Rs 26,35,510/-) being certain payments lying under suspense account in absence of information

NOTE 12

The Company has taken premises under operating lease. The escalation clause is applicable on renewal. There is no restriction imposed by lease agreements. These lease agreements are normally renewed on expiry. Expense charged to profit and loss account is Rs. 2,34,000/- (PY: Rs. 6,59,292/-).

NOTE 13 - SEGMENT REPORTING

Segment reporting as required by AS-17 issued by the ICAI notified by Ministry of Corporate Affairs.

1.Business Segment: The Company is mainly engaged in a single business segment of Manufacturing and Trading of Iron & Steel Products, accordingly there is no separate reportable segment as per Accounting Standard 17 “Segment Reporting”.

2.Geographical Segment: This segment has been considered for Secondary Segment Reporting. Since the Company does not have any transaction outside India as sales being in the domestic market only, the disclosure requirement of Accounting Standard- 17 “Segment Reporting”, notified under the Companies Act, 2013 is not applicable.

NOTE 14

Previous year’s figures have been reworked, regrouped, rearranged and reclassified wherever considered necessary to conform to this year’s classification. Accordingly, amounts and other disclosures for the preceding year are included as an