j. Provisions & Contingent Liability
A provision is recognized if, as a result of a past event, the company has a present obligation (legal or constructive) that is reasonably
estimable and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are not
recognized for future operating losses.
Where the effect of time value of money is material, provisions are measured at the present value of management's best estimate
of the 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 passage of time is recognized as interest expense.
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.
k. Inventories
Basis of valuation
Inventories are valued at the lower of cost and net realizable value.
Method of valuation:
i. Raw materials: Cost includes cost of purchase and other costs incurred in bringing the inventories to their present location
and condition.Cost is determined on a weighted average basis.
ii. Finished goods and work in progress: Cost of finished goods and work-in-progress comprises direct materials,direct labour
and an appropriate proportion of variable and fixed overhead expenditure, the latter being allocated on the basis of normal
operating capacity.
iii. Stores and spares: Cost is determined on weighted average basis.
iv. Stock-in-trade: Cost is determined on weighted average basis.
v. Scrap and By Products: At net realizable value.
The Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and
estimated costs necessary to make the sale.
l. Earnings per share
Basic earnings per share is calculated by dividing the net profit or loss for the year attributable to equity shareholders by the
weighted average number of shares outstanding during the year.
Diluted earnings per share is calculated by dividing the net profit or loss for the year attributable to equity shareholders and the
weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.
m. Trade Receivables
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest
method,less provision for impairment.
n. Cash and bank balances
Cash and bank balances consist of:
Cash and cash Equivalents
Cash and cash equivalents in the balance sheet comprise cash on hand, balance with banks and short term deposits with an
original maturity of three months, which are subject to an insignificant risk of changes in value. For the purpose of the statement of
cash flows, cash and cash equivalents consist of cash on hand, in banks and short term deposits with an original maturity of three
months net of outstanding bank overdrafts as they are considered integral part of the company's cash management.
Other bank balances
This includes balances and deposits with banks that are restricted for withdrawal and usage having maturity of more than three
months extending upto twelve years.
o. Segment Reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision
maker. The Company is predominantly engaged in a single reportable segment of'Iron and Steel" during the year.
p. Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets that necessarily takes
a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the asset. All other
borrowing costs are expensed in the period in which they occur. Borrowing costs consist of interest and other costs that an entity
incurs in connection with the borrowing of funds. Borrowing cost also includes exchange differences to the extent regarded as an
adjustment to the interest costs.
q. Government grants and subsidies
Grants and subsidies from the government are recognized when there is a reasonable assurance that the grant/subsidy will be
received and all attaching conditions will be complied with.
When the grant or subsidy relates to an expense item, it is recognized as income over the periods necessary to match them on a
systematic basis to the costs, which it is intended to compensate.
Where the grant or subsidy relates to an asset, its value is deducted in arriving at the carrying amount of the related asset.
Government grants of the nature of promoter's contribution are credited to capital reserve and treated as a part of shareholder's funds.
r. Financial Instruments
Initial Recognition
The company recognizes financial assets and financial liabilities including derivatives when it becomes a part to the contractual
provisions of the instrument. All financial assets and liabilities are recognized at fair value on initial recognition, except for trade
receivables which are initially measured at transaction price. Transaction costs that are directly attributable to the acquisition or
issue of financial assets and financial liabilities, those are not at fair value through profit or loss, are added to the fair value on initial
recognition. Regular way purchase and sale of financial assets are accounted for at trade date i.e., the date at which the company
commits to purchase or sell the asset.
Effective interest method
The effective interest method is a method of calculating the amortised cost of a financial instrument and of allocating interest
income or expense over the relevant period.The effective interest rate is the rate that exactly discounts future cash receipts or
payments through the expected life of the financial instrument, or where appropriate, a shorter period.
Subsequent Measurement
a. Derivative financial instruments
Derivative instruments used by the Company include forward exchange contracts.These financial instruments are utilised
to hedge future transactions.The company does not hold or issue derivative financial instruments for trading purposes. All
transactions in derivative financial instruments are undertaken to manage risks arising from underlying business activities.
b. Non-derivative financial instruments
Financial Assets:
(i) Financial assets carried at amortized cost:
A financial asset is subsequently measured at amortized cost if it is held within a business model whose objective is
to hold the asset in order to collect contractual cash flows and the contractual terms of the financial asset give rise on
specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
After initial measurement, such financial assets are subsequently measured at amortized cost using the effective interest
rate (EIR) method. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or
costs that are an integral part of the EIR. The EIR amortization is included in finance income in the profit or loss. The losses
arising from impairment are recognized in the statement of profit and loss.
(ii) Financial assets at fair value through other comprehensive income (FVTOCI):
A financial asset is subsequently measured at fair value through other comprehensive income if it is held within a
business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and the
contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and
interest on the principal amount outstanding.
The company recognizes impairment losses and reversals and foreign exchange gain to the statement of Profit and Loss
. On derecognition of the asset, cumulative gain or loss previously recognized in OCI is reclassified from the equity to the
statement of Profit and Loss. Interest earned while holding FVTOCI debt instrument is reported as interest income using
the EIR method.
(iii) Financial assets at fair value through profit or loss (FVTPL):
A financial asset which is not classified in any of the above categories is subsequently measured at fair valued through
profit or loss. The company may elect to designate a debt instrument, which otherwise meets amortized cost or FVTOCI
criteria, as at FVTPL, which is thereafter irrevocable. However, such election is allowed only if doing so reduces or eliminates
a measurement or recognition inconsistency (referred to as 'accounting mismatch'). The company has not designated any
debt instrument as at FVTPL.
Financial liabilities:
Financial liabilities are subsequently carried at amortized cost using the effective interest method except for contingent
consideration recognized in a business combination which is subsequently measured at fair value through profit and loss. For
trade and other payables maturing within one year from the balance sheet date, the carrying amounts approximate fair value
due to the short maturity of these instruments. The company's financial liabilities include trade and other payables and loans
and borrowings.
Loans and Borrowings- After initial recognition, interest-bearing loans and borrowings are subsequently measured at
amortized cost using the EIR method. Gains and losses are recognised in the statement of Profit and Loss when the liabilities
are derecognized as well as through the EIR amortization process. Amortized cost is calculated by taking into account any
discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included as
finance costs in the statement of profit and loss.
Derecognition of Financial Instruments
The company derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire or it
transfers the financial asset and the transfer qualifies for derecognition under Ind AS 109. A financial liability (or a part of a financial
liability) is derecognized from the company's balance sheet when the obligation specified in the contract is discharged or cancelled
or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or
the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of
the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognized in the
Statement of Profit and Loss.
Fair Value of Financial Instruments
In determining the fair value of its financial instruments, the company uses a variety of methods and assumptions that are based
on market conditions and risks existing at each reporting date. The methods used to determine fair value include discounted cash
flow analysis, available quoted market prices and dealer quotes. All methods of assessing fair value result in general approximation
of value, and such value may never actually be realized.
Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet where there is a legally
enforceable right to offset the recognized amounts and there is an intention to settle on a net basis, or realise the asset and settle
the liability simultaneously.This legally enforceable right must not be contingent on future events and must be enforceable in the
normal course of business.
s. Impairment
a. Financial assets
Financial assets,other than those assets which are measured at fair value through profit or loss, are assessed for indicators of
impairment at the end of each reporting period.The Company recognises a loss allowance for expected credit losses on financial
asset.In case of trade receivables,the Company follows the simplified approach permitted by Ind AS 109-Financial Instruments
for recognition of impairment loss allowance.The application of simplified approach does not require the Company to track
changes in credit risk.The Company calculates the expected credit losses on trade receivables using a provision matrix on the
basis of its historical credit loss experience.
b. Non-financial assets
Intangible assets and property, plant and equipment are evaluated for recoverability whenever events or changes in
circumstances indicate that their carrying amounts may not be recoverable. For the purpose of impairment testing, the
recoverable amount (i.e. the higher of the fair value less cost to sell and the value-in-use) is determined on an individual asset
basis unless the asset does not generate cash flows that are largely independent of those from other assets. In such cases, the
recoverable amount is determined for the Cash Generating Unit (CGU) to which the asset belongs.
If such assets are considered to be impaired, the impairment to be recognized in the Statement of Profit and Loss is measured by
the amount by which the carrying value of the assets exceeds the estimated recoverable amount of the asset. An impairment loss is
reversed in the Statement of Profit and Loss if there has been a change in the estimates used to determine the recoverable amount.
The carrying amount of the asset is increased to its revised recoverable amount, provided that this amount does not exceed the
carrying amount that would have been determined (net of any accumulated amortization or depreciation).
t. Foreign currencies
The functional currency of the Company is determined on the basis of the primary economic environment in which it operates. The
functional currency of the Company is Indian National Rupee (INR). The transactions in currencies other than the entity's functional
currency (foreign currencies) are recognised at the rates of exchange prevailing at the dates of the transactions. At the end of
each reporting year, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Non¬
monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the date
when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are
not retranslated. Exchange differences on monetary items are recognised in Statement of Profit and Loss in the year in which they
arise except for exchange differences on foreign currency borrowings relating to assets under construction for future productive
use, which are included in the cost of those assets when they are regarded as an adjustment to interest costs on those foreign
currency borrowings.
u. Fair value measurement
A number of company's accounting policies and disclosures require the measurement of fair values for both Financial and Non
Financial Assets and Liabilities
The management measures financial instruments at fair value at each balance sheet date.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market
participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset
or transfer the liability takes place either:
Ý In the principal market for the asset or liability, or
Ý In the absence of a principal market, in the most advantageous market for the asset or liability
The principal or the most advantageous market must be accessible by the company.
The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset
or liability, assuming that market participants act in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market participant's ability to generate economic benefits
by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest
and best use.
The management uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to
measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value
hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:
Ý Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities
Ý Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or
indirectly observable
Ý Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.
For assets and liabilities that are recognized in the financial statements on a recurring basis, the management determines whether
transfers have occurred between levels in the hierarchy by re-assessing categorization (based on the lowest level input that is significant
to the fair value measurement as a whole) at the end of each reporting period.
v. Employee benefits
i Short Term Employee Benefits
Short term employee benefit obligations are measured on an undiscounted basis and are expensed as the related services
are provided. Liabilities for wages and salaries, including non-monetary benefits that are expected to be settled wholly within
twelve months after the end of the period in which the employees render the related service are recognized in respect of
employee's services up to the end of the reporting period.
ii Other Long Term Employee Benefits
The liabilities for earned leaves that are not expected to be settled wholly within twelve months are measured as the present
value of the expected future payments to be made in respect of services provided by employees up to the end of the reporting
period using the projected unit credit method. The benefits are discounted using the government securities (G-Sec) rates at
the end of the reporting period that have terms approximating to the terms of related obligation. Remeasurements as the
result of experience adjustment and changes in actuarial assumptions are recognized in the Statement of Profit and Loss.
iii Post-Employment Benefits
The Company operates the following post-employment schemes:
Defined Benefit Plans
The liability or asset recognized in the Balance Sheet in respect of defined benefit plans is the present value of the defined
benefit obligation at the end of the reporting period less the fair value of plan assets. The Company's net obligation in respect
of defined benefit plans is calculated separately for each plan by estimating the amount of future benefit that employees have
earned in the current and prior periods. The defined benefit obligation is calculated annually by Actuaries using the projected
unit credit method. The liability recognized for defined benefit plans is the present value of the defined benefit obligation at
the reporting date less the fair value of plan assets, together with adjustments for unrecognized actuarial gains or losses and
past service costs. The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit
obligation and the fair value of plan assets. The benefits are discounted using the government securities (G-Sec) rates at the end
of the reporting period that have terms approximating to the terms of related obligation. Remeasurements of the net defined
benefit obligation, which comprise actuarial gains and losses, the return on plan assets (excluding interest) and the effect of
the asset ceiling, are recognized in other comprehensive income. Remeasurement recognized in other comprehensive income
is reflected immediately in retained earnings and will not be reclassified to the Statement of Profit and Loss.
Defined Contribution Plan
Contributions to defined contribution plans include provident fund contribution to government administered fund and are
charged to the Statement of Profit and Loss as and when incurred. Such benefits are classified as defined contribution plans
since the Company does not carry any further obligations, apart from the contributions made on monthly basis.
Impact of Labour Codes
The Government of India has consolidated 29 existing labour legislations into a unified framework comprising four labour
codes as follows: Code on Wages, 2019, Code on Social Security, 2020, Industrial Relations Code ,2020 and Occupational Safety,
Health and Working Conditions Code 2020 (collectively) referred to as the New Labour Codes). The New Labour Codes are
effective from 21 November 2025 and introduce changes, among other things setting a uniform definition of wages. The
New Labour Codes have implications on employee benefits including gratuity, leave encashment and has recognized an
incremental cost of H3.31 crores towards employee benefits and past service cost of plan amendments during the year ended
31st March, 2026. During the quarter ended 31st March, 2026, the company has recognised Exceptional Items of expenses of
H3.31 crores for past service cost of new labour code application.
w. Rounding Off
All amount disclosed in the financial statements and notes have been rounded off to the nearest crores as per requirement of
Schedule III, unless otherwise stated.
x. Taxes
Tax comprises current and deferred tax. It is recognized in profit or loss except to the extent that it relates to a business combination
or to an item recognized directly in equity or in other comprehensive income.
Current tax
Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to
the tax payable or receivable in respect of previous years. The amount of current tax reflects the best estimate of the tax amount
expected to be paid or received after considering the uncertainty, if any, related to income taxes. It is measured using tax rates (and
tax laws) enacted or substantively enacted by the reporting date.
Current tax assets and current tax liabilities are offset only if there is a legally enforceable right to set off the recognized amounts,
and it is intended to realize the asset and settle the liability on a net basis or simultaneously.
Deferred tax
Deferred tax is recognized in respect of temporary differences between the carrying amount of assets and liabilities for financial
reporting purposes and the corresponding amounts used for taxation purposes. Deferred tax is also recognized in respect of carried
forward tax losses and tax credits. Deferred tax is not recognized for:
Ý temporary differences arising on the initial recognition of assets or liabilities in a transaction that is not a business combination
and that affects neither accounting nor taxable profit or loss at the time of the transaction;
Ý taxable temporary differences arising on the initial recognition of goodwill.
Deferred tax assets are recognized using liability method, to the extent that it is probable that future taxable profits will be available
against which they can be used. The company recognises a deferred tax asset only to the extent that it has sufficient taxable
temporary differences or there is convincing other evidence that sufficient taxable profit will be available against which such
deferred tax asset can be realized. Deferred tax asset - unrecognized or recognised, are reviewed at each reporting date and are
recognised/reduced to the extent that it is probable/ no longer probable respectively that the related tax benefit will be realized.
The measurement of deferred tax reflects the tax consequences that would follow from the manner in which the company expects,
at the reporting date, to recover or settle the carrying amount of its assets and liabilities.
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they
relate to income taxes levied by the same tax authority.
Deferred tax for the period
Deferred Tax are recognised as an expense or income in the Statement of Profit and Loss except when they relate to items credited or
debited either in other comprehensive income or directly in equity, in which case the tax is also recognised in other comprehensive
income or directly in equity.
y. Investment in Subsidiary Companies, Joint ventures and Associates
Investments in subsidiaries, joint ventures and associates are carried at cost less accumulated impairment losses, if any. Where an
indication of impairment exists, the carrying amount of the investment is assessed and written down immediately to its recoverable
amount. On disposal of investments in subsidiaries, the difference between net disposal proceeds and the carrying amounts are
recognized in the Statement of Profit and Loss. However, the company has fully provided for the diminution in the value of the
investments of two joint venture companies.
z. Recent accounting pronouncements
Ministry of Corporate Affairs("MCA") has notified amendments to the existing standards Ind AS 1-Presentation of financial statements
relating to classification of liabilities as current or non-current subject to covenants, Ind AS 12-Income Taxes relating to international
tax reforms-Pillar Two Model Rules, Ind AS 21-the effect of changes in foreign exchange rates and Ind AS107-Financial Instruments
: Disclosures and Ind AS 7-Statement of Cash flows relating to disclosure of supplier financing arrangements, applicable from April
1,2025. The Company has assessed that there is no significant impact on its financial statements with respect to the amendments
in Ind AS 1, Ind AS 21 and Ind AS 12.The company has assessed the existence of supplier finance arrangements and concluded that
no such arrangements existed during the reporting period. Accordingly, no disclosures are required under the applicable provisions
of Ind AS.
Expected Credit Loss:
In determining the allowances for credit losses of trade receivables, the Company has used a practical expedient by computing the expected
credit loss allowance for trade receivables based on a provision matrix. The provision matrix takes into account historical credit loss experience
and is adjusted for forward looking information. The expected credit loss allowance is based on the ageing of the receivables that are due
and rates used in the provision matrix.
During the year,the company recognized a reversal of Expected Credit Loss(ECL) on trade receivables due to changes in the discount rate
assumptions used in measuring expected credit losses, resulting in a reduction in the ECL allowance.
(i) Terms/rights attached to equity shares
The Company has only one class of ordinary shares (equity shares) having at par value of H2/- each. Each shareholder of ordinary shares
(equity shareholders) is entitled to one vote per share .The Company declares and pays dividend if any in Indian Rupees. The dividend
proposed if any by the Board of Directors is subject to approval of the share holders in the ensuing annual general meeting except in the
case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company
after distributions of all preferential amounts , in the proportions to their share holdings.
(ii) Lock-in-of-Shares
The Equity Shares allotted to companies falling under the promoter group pursuant to conversion of warrants issued on preferential
basis are under lock-in as follows:
17: Other Equity (Contd.)
Nature and purpose of reserves:
(a) Capital Reserve: Capital Reserve represents amount received from West Bengal Industrial Development Corporation as a Capital
Subsidy,amount forfeited agianst equity warrant application money and term loan amount written back .
(b) Amalgamation Reserve: Amalgmation Reserve represents amount arisen on Amalgamation of erstwhile Shri Ramrupai Balaji
Steels Limited.
(c) Securities Premium Account: Securities Premium represents the amount received in excess of face value of securities and forfeited
of shares.
(d) General Reserve: The Company has transferred a portion of the net profit of the company before declaring dividend to general reserve
pursuant to the earlier provisions of Companies Act, 1956. Mandatory transfer to general reserve is not required under the Companies
Act, 2013.
(e) Retained Earnings: Retained earnings represent the amount of accumulated earnings of the company.
(f) Remeasurements of Net Defined Benefit Plans: Differences between the interest income on plan assets and the return actually received
and any changes in the liabilities over the year due to changes in actuarial assumptions or experience adjustments within the plans are
recognised in 'Other comprehensive income'and subsequently not reclassified to the Statement of Profit and Loss.
(g) Equity Instruments through Other Comprehensive Income: The fair value change of the equity instrument measured at fair value
through other comprehensive income is recognised in Equity instruments through Other Comprehensive Income.
Note:
Rupee Loan from Financial Institution
Rupee Term Loan of H519.00 crore which was sanctioned by the Tata Capital Limited and its assignees,the company has fully repaid & for
closed the entire outstanding debt pertaining to two assignees(combined sanctioned amount is H146.98 crore)
During the period under audit FY 2025-26:
1. The company has raised H85.00 crore towards reimbursement of capex expenditure incurred in projects of the company from two
NBFCs.The company also facilitate by freshly sanctioned Working Captal Demand Loan of H60 crore (H30 crore from each lender) from
two NBFCs.
2. Indian Overseas Bank has sanctioned and disbursed fund base and non-fund base working capital facilities aggregating up to H100 crore
to the company.
3. Kotak Mahindra Bank has disbursed the working capital limit from H40 crore to H90 crore.
Primary security of the aforesaid loans:
a. Rupee Term Loans from various lenders are secured by 1st pari passu charge over the entire fixed assets (both present and future) and 1st
pari passu charge over the entire current assets (both present and future) of the Company's units at Raniganj and Durgapur in the state
of West Bengal and Durg in the state of Chattisgarh.
b. Working Capital Loan/Working Capital Demand Loan from various lenders are secured by 1st pari passu charge over the entire fixed
assets (both present and future) and 1st pari passu charge over the entire current assets (both present and future) of the Company's units
at Raniganj and Durgapur in the state of West Bengal and Durg in the state of Chattisgarh.
The above loans are further secured as follows.
Note 35A : Contingent liabilities
In the ordinary course of business, the Company faces claims and assertions by various parties. The Company assesses such claims and
assertions and monitors the legal environment on an on-going basis with the assistance of external legal counsel, wherever necessary. The
Company records a liability for any claims where a potential loss is probable and capable of being estimated and discloses such matters in its
financial statements, if material. For potential losses that are considered possible, but not probable, the Company provides disclosure in the
financial statements but does not record a liability in its accounts unless the loss becomes probable.
The following is a description of claims and assertions where a potential loss is possible, but not probable. The Company believes that none
of the contingencies described below would have a material adverse effect on the Company's financial condition, results of operations or
cash flows.
Note 36 :
Deferred tax liabilities are recognised for all deductible temporary differences and any unused tax credits and unused tax losses.Deferred
tax liabilities are recognised to the extent that it is probable that taxable profit will be available against which the deductible temporary
differences,and the carry forward of unused tax credits and unused tax losses.Deferred tax liabilities are recognised to the extent that it is
probable that taxable profit will be available against which the deductible temporary differences,and the carry forward of unused tax credits
and unused tax losses can be utilized.Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at
the balance sheet date and derecognized to the extent it is no longer probable that sufficient future taxable profits will be available against
which such deferred tax liabilities can be realized.Deferred tax items are recognized in correlation to the underlying transaction either in the
Statement of Profit and Loss or other comprehensive income or directly in equity.
Note 37 : Leases
The Company determines whether an arrangement contains a lease by assessing whether the fulfillment of a transaction is dependent on
the use of a specific asset and whether the transaction conveys the right to use that asset to the Company in return for payment. Where this
occurs, the arrangement is deemed to include a lease and is accounted for either as finance or operating lease.
Leases are classified as finance leases where the terms of the lease transfers substantially all the risks and rewards of ownership to the lessee,
because of the lease period of land 90 or more years then the fair value computation for finance lease will have no material difference
comparing to its carrying value, so that the company considered as finance lease.
The Company as lessee
Finance Lease:
Finance Leases are capitalised at the commencement of lease, at the lower of the fair value of the property or the present value of the
minimum lease payments.The corresponding liability to the lessor is included in the balance sheet as a finance lease obligation. Lease
payments are apportioned between finance charges and reduction of the lease obligation so as to achieve a constant rate of interest on the
remaining balance of the liability. Finance charges are recognised in the statement of profit and loss over the period of the lease.
Leasehold Rental Property
The company has taken office premises on lease for a term of 9 years. The lease has been accounted for in accordance with Ind AS 116.
Accordingly,the company has recognized a Right-of-Use asset and a corresponding lease liability.The Right-of-Use asset is depreciated over
the lease term, and interest expenses is recognized on the lease liability using the effective interest method.
Note : 38
During the year, the Company has not recognised any income under the scheme for the following subsidies / incentives receivable from the
Government of West Bengal under West Bengal Incentive Scheme aggregating to H Nil (H Nil): Pre Goods & Service Tax (GST), the company was
enjoying certain benefits under Industrial Promotion Scheme of State Government Post GST, pending notifications by the State Government
on prudent basis.
Defined benefit plans
Gratuity
The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service is entitled to gratuity on
terms not less favourable than The Provisions of Payment of Gratuity Act, 1972. The scheme is funded with an insurance company in the form
of a qualifying insurance policy.
Liabilities with regard to these defined benefit plans are determined by actuarial valuation, performed by an external actuary at each Balance
Sheet date using the projected unit credit method.These defined benefit plans expose the Company to actuarial risks, such as longevity risk,
interest rate risk and market risk.
The Company recognizes the net obligation of a defined benefit plan in its Balance Sheet as an asset or liability. Gains and losses through
re-measurements of the net defined benefit liability/(asset) are recognized in other comprehensive income and are not reclassified to profit
or loss in subsequent periods. The actual return of the portfolio of plan assets, in excess of the yields computed by applying the discount
rate used to measure the defined benefit obligation is recognized in other comprehensive income. The effect of any plan amendments is
recognized in net profit in the Statement of Profit and Loss.
Note 41 : Segment Information
As per Ind AS 108 "operating segments" specified under section 133 of the Companies Act, 2013, the Company is predominantly engaged in
a single reportable segment of Iron and Steel.
c) Terms and conditions of transactions with realated parties
All Related Party Transactions entered during the year were in ordinary course of the business and on arm's length basis. Outstanding
balances at the year end are unsecured. For the year ended 31st March, 2026, the Company has not recorded any impairment of
receivables relating to amounts owed by related parties (31st March, 2025 NIL).
Note 44 : Capital Management
The Company's capital management is intended to create value for shareholders by facilitating the meeting of long- term and short-term
goals of the Company.
The Company determines the amount of capital required on the basis of annual operating plans and long-term product and other strategic
investment plans. The funding requirements are met through equity and other long-term/short -term borrowings. The Company's policy is
aimed at combination of short- term and long-term borrowings.
The Company monitors the capital structure on the basis of total debt to equity ratio and maturity profile of the overall debt portfolio of
the Company.
b) Fair value hierarchy
The table shown below analyses financial instruments carried at fair value, by valuation method. The different levels have been
defined below:
- Level 1: Level 1 hierarchy includes Financial Instruments measured using Quoted prices. This include listed equity instruments,
mutual funds that have quoted price. The Fair Value of all equity instruments which are traded in stock exchanges is valued using
the closing price as at the reporting period. The mutual funds are valued using the closing NAV.
- 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 equity securities, contingent consideration and indemnification asset included in Level 3.
The Company is exposed to liquidity risk, market risk, credit risk. The company's senior management oversees the management of these risks.
The Company's senior management is supported by a financial risk committee that advises on financial risks and the appropriate financial
risk governance framework for the Company. The financial risk committee provides assurance to the Company's senior management that the
Company's financial risk activities are governed by appropriate policies and procedure and that financial risks are identified, measured and
managed in accordance with the Company's policies and risk objectives. The Board of Directors reviews and agrees policies for managing
each risk, which are summarised as below:
(A) Liquidity Risk
Liquidity risk is the risk that the company will face in meeting its obligations associated with its financail liabilities. The Company's approach
in managing liquidity is to ensure that it will have sufficient funds to meet its liabilities when due without incurring unacceptable losses.
In doing this, management considers both normal and stressed conditions.
The Company maintained a cautions liquidity strategy, with a positive cash balance throughout the year ended 31st March, 2026 and 31st
March, 2025. Cash flow from operating activities provides the funds to service the financial liabilities on a day-to-day basis.
The following table shows the maturity analysis of the Company's financial assets and financial liabilities bases on contractually agreed
undiscounted cash flows along with its carrying value as at the Balance Sheet date.
(B) 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 interest risk and currency risk and other price risk. Financial Instrument affected by market risk include loans and
borrowings in foreign currency.
a) 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.The Company's exposure to the risk of changes in market interest rates relates primarily to the Company's long term
debt obligations with floating interest rates. The Company is not carrying its borrowings primarily at variable rate.
b) Currency risk
The Company is subject to the risk that changes in foreign currency values impact the Companys export revenue and imports of
raw material and property, plant and equipment.
The following table demonstrate the sensivity to a reasonable possible change in USD, EURO, Ruble, AUD, AED, GBP and SEK
exchange rates, with all other variables held constant. The impact on the Company's profit/(loss) is due to changes in the fair value
of monetary assets and liabilities.
(C) Credit Risk
Credit risk is the risk of financial loss arising from counter party failure to repay or service debt acording to the contractual terms
or obligations. Credit risk encompasses both the direct risk of default and the risk of deterioration of creditworthiness as well as
concentration risks.
The Company has a policy of dealing only with credit worthly counter parties and obtaiining sufficient collateral, where apropriate
as a means of matigating the risk of financial loss from defaults. Financial instruments that are subject to credit risk and concentration
thereof principally consist of trade receivables, loans, receivables, investments, cash and cash equivalents, derivatives and financial
gurantees provided by the company. None of the financial instruments of the company results in material concentration of
credit risk.
The carrying value of financial assets represents the maximum credit risk. The maximum exposure to the credit risk was H521.82
crores and H709.52 crores as at March 31,2026 and March 31,2025 respectively, being the total carrying value of trade receivables,
balances with bank, bank deposits, investments in debt securities and other financial assets.
Note 50 : Fair Valuation of Investments:
Ind AS 101 provides an option on transition date to consider fair value of the investment in joint venture as on the date of transition as the
deemed cost as cost for the purpose of Para 10 of Ind AS 27. Accordingly the Company has valued as a deemed cost. The company has
prudently brought down the value of its investments in two of its joint ventures viz Andal East Coal Co Pvt Ltd and Rohne Coal Co Pvt Ltd
as on 1st April, 2016 with a corresponding impact on Other Equity (Retained earnings) and also fair valued its investment of equity shares
calcutta stock exchange as on 1st April 2016 to arrive at the book value with a corresponding impact on Other Equity (Retained earnings).
However the company has fully provided for the diminution in the value of investments of two joint venture companies.
Explanation for variance more than 25%:
a. Mainly due to a substantial reduction in EBITDA during the year which adversely impacted the company's ability to service its debt
obligations..
b. The ratio decreased due to lower debt levels relative to equity.
c. The ratio decreased due to a significant decline in operating profit during the year.
d. The ratio decreased due to lower net profit during the year.
e. The ratio decreased mainly due to repayment of borrowings, resulting in lower debt levels relative to total assets.
f. The ratio decreased on account of lower profitability, resulting in reduced returns on shareholders funds.
g. The ratio decreased due to a significant decline in operating profit during the year.
h. The ratio decreased due to lower profitability during the year.
Balances of some parties (including of Trade receivables and Trade payables) and loans and advances are subject to reconciliation/
confirmations from the respective parties. The management does not expect any material differences affecting the financial statement for
the year.
Note 54 : Exceptional Items
The Government of India has consolidated 29 existing labour legislations into a unified framework comprising four labour codes as follows:
Code on Wages, 2019, Code on Social Security, 2020, Industrial Relations Code, 2020 and Occupational Safety, Health and Working Conditions
Code 2020 (collectively referred to as the New Labour Codes).The New Labour Codes are effective from 21 November 2025 and introduce
changes, among other things setting a unifirm definition of wages. The New Labour Codes have implications on employee benefits including
gratuty, leave encashment and has recognized an incremental cost of H3.31 crores towards employee benefits as past service cost of plan
amendments during the year ended 31st March, 2026. During the year ended 31st March, 2026, the company has recognised Exceptional
items of expenses of H3.31 crores for past service cost of new labour code application.
Note 55 : Disclosure of Transcations with struck off companies
The Company did not have any material transcations with companies struck off under Section 248 of the Companies Act, 2013 or Section 560
of the Companies Act, 1956 during the financial year.
Note 56 : Corporate social responsibility (CSR)
As per Section 135 of the Companies Act, 2013, a company, meeting the applicability threshold, needs to spend at least 2% of its average net
profit for the immediately preceding three financial years on corporate social responsibility (CSR) activities. The areas for CSR activities are rural
development project, promoting health care including preventive health care and promoting education, development of rural sports. A CSR
committee has been formed by the company as per the Act. The funds were primarily utilized through the year on these activities which are
specified in Schedule VII of the Companies Act, 2013.
Note : 57 Other disclosure requirements as notified by MCA pursuant to amended Schedule III:
(a) Details of Benami Property held: The company does not hold any Benami property, hence there were no proceeding initiated or
pending against the company for holding any benami property under The Benami Transactions (Prohibitions) Act, 1988 and the Rules
made thereunder, hence no disclosure is required to be given as such.
(b) Wilful defaulter: The company has not been declared as wilful defaulter as at the date of the Balance Sheet or on the date of approval
of the Financial Statements, hence no disclosure is required as such.
(c ) Registration of Charges or Satifaction with Registrar of Companies (ROC): There were no charges against the company which are
yet to be registered or satification yet to be registered with ROC beyond the Statutory period, hence no disclosures is required as such.
(d) Compliance with Number of Layers of Companies: The company, if applicable, has complied with the number of layers prescribed
under clause 87 of Section 2 of the Companies Act, 2013 read with Companies (Restriction on Number of Layers) Rules, 2017, hence no
disclosure is required as such.
(e) Details of Crypto Currency or Virtual Currency: The company has not traded or invested in Crypto Currency or Virtual Currency
during the Financial Year, hence no disclosure is required for the same.
(f) Disclosure in Relation to Undisclosed Income : During the year the Company has not surrendered or disclosed any income in the tax
assessments under the Income Tax Act 1961 ( Such as, search or survey or any other relevants provisions of the Income Tax Act 1961).
Accordingly, there are no transactions which are not recorded in the books of accounts
(g) Property Plant & Equipment : Title deeds of immovable properties in the case of freehold land, (for description refer note no 3) are held
in the name of the Company. In case of leasehold land (refer note no 3A) where the company is the lessee, the lease agreements are duly
executed in favour of the Company (being a lessee).
(h) Borrowing Secured Against Current Assets : The company has obtained working capital and term loan facilities from its banks/
financial institution, which are secured by a first charge on current assets, including inventories, trade receivables and other current assets
of the company. The quarterly returns / statements of current assets filed by the company with the banks are generally in agreement
with the books of account.
(i) Utilisation of borrowed funds : All the borrowed funds have been utilised for the purpose they are sanctioned for. There is no diversion
in the utilisation of such funds. Thus no disclosures are required.
Note 58 :
The Company had a Subsidiary Company namely Kesarisuta Industries Uganda Limited and two Joint Venture Companies namely Rohne
Coal Company Private Limited and Andal East Coal Company Private Ltd (Under liquidation). The Board of Directors of the Company at its
meeting held on 16th April, 2025 approved the closure of the said subsidiary company. The notice of cessation of business by the subsidiary
company was published in the Uganda Gazette on 27th June, 2025. Hence it ceased to be subsidiary of the company.The Board of Directors of
the Company at its meeting held on 12th February, 2026 has approved the termination of the Joint Venture Agreement dated 5th March, 2008
in relation to Rohne Coal Company Private Limited with immediate effect as the purpose for which the Joint Venture was formed no longer
subsists pursuant to the de-allocation of the Rohne Coking Coal Block. Further, the Joint Venture Agreement dated 21st January, 2009 in
relation to Andal East Coal Company Private Limited (JV Company) is no longer in force as the JV company is under liquidation. Hence, Rohne
Coal Company Private Limited and Andal East Coal Company Private Limited ceased to be Joint Ventures of the Company and therefore, the
consolidated financial results have not been submitted.
With effect from April 1, 2023, the Ministry of Corporate Affairs (MCA) has made it mandatory for every company which uses accounting
software for maintaining its books of account, to use only such accounting software which has a feature of recording audit trail of each
and every transaction, creating an edit log of each change made in books of account along with the date when such changes were made
and ensuring that the audit trail cannot be disabled. The company uses acounting software SAP HANA to maintain its books of accounts.
implementation of the above notification to ensure enabling appropriate audit log on financial tables in aforesaid SAP HANA, which have high
frequency database operations would lead to a severe system performance degradation thereby adversely impacting business operations
and users, besides requiring significant additional storage and supporting infrastructure. With a view to address the above challenges
while ensuring compliance with the MCA notification and mitigate the risks involved therein, the Company has appropriately designed an
implemented alternate mitigating controls over direct change at database level. Further the audit trail, to the extent maintained in prior year,
has been preserved by the company as per the statutory requirements for record retention.
Note 60 :
Figures of previous years have been regrouped/rarranged/rectified, wherever necessary.
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