Notes to Accounts of Arfin India Ltd.

Mar 31, 2018

Note-1 Company Overview and Significant Accounting Policies

1. Corporate Information

Arfin India Limited (the “Company”) is a public Company domiciled in India and incorporated under the provisions of Companies Act, 1956. Its shares are listed on Bombay Stock Exchange Limited and the Calcutta Stock Exchange Limited. The registered office of the Company is located at B-302, 3rd Floor, Pelican House, Near Gujarat Chamber of Commerce Building, Ashram Road, Ahmedabad-380009, Gujarat, India. The Company is engaged in the business of manufacturing, trading and selling of various non-ferrous metal products and its manufacturing facilities are located at Chhatral in the State of Gujarat. The Company caters to both domestic and as well as international markets.

The Hon’ble National Company Law Tribunal, Ahmedabad Bench (“NCLT”) vide its order dated February 22, 2018 has approved the Scheme of Amalgamation of Mahendra Aluminium Company Limited (“MALCO”) with Arfin India Limited (“the Company”). Appointed date for the scheme is April 01, 2017. Accordingly books of both the above Companies have been merged for preparing financial statements for the financial year 2017-18.

The financial statements were authorized for issue in accordance with a resolution of the Board of Directors dated May 18, 2018.

2.1 Inventories are hypothecated to Secured Working Capital Facilities from State Bank of India, Axis Bank and IDBI Bank.

2.2 Raw Materials inventory includes goods in transit which are lying at custom port worth Rs. 159.31 lakhs as at March 31, 2018.

3.1 Trade Receivables are hypothecated to Secured Working Capital Facilities from State Bank of India, Axis Bank and IDBI Bank.

4.1 There are no amounts due and outstanding to be credited to the Investor Education and Protection Fund as at March 31, 2018.

* Includes Rs. 200 lakhs (Previous Year Rs. 200 lakhs) as Margin Money Deposit (Lien) against Borrowings from Axis Bank and IDBI Bank.

* Includes FDR of Rs. 104.93 lakhs (Previous Year Rs. 248.21 lakhs) against Buyers Credit Taken from Banks.

5.1 *During the Financial Year 2017-18, Mahendra Aluminium Company Limited (MALCO) has been amalgamated into Arfin India Limited. Accordingly, Authorized Share Capital of MALCO (15,00,000 Equity Shares of Rs. 10/- Each) has been added to the Authorized Share Capital of Arfin India Limited.

5.2 The Company has only One Class of Ordinary Equity Shares having Par Value of Rs. 10/- Each and the holders of these Ordinary Shares are entitled to receive Dividends as and when declared by the Company. Each holder of the Equity Shares is entitled to one vote per share. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company, after distribution to all preferential amounts, in proportion to their shareholding.

5.3 The Board of Directors in their meeting held on May 18, 2018 has recommended the final dividend of Rs. 2/- (i.e. 20%) per equity share of Rs. 10/- each for the financial year ended on March 31, 2018. Payment of the same is subject to approval of shareholders in their ensuing Annual General meeting.

5.4 During the year the Company has, on November 03, 2017, issued and allotted 81,02,314 Bonus Equity Shares to the shareholders holding shares as on the record date fixed for this purpose, i.e. November 02, 2017 in the ratio of 2:1 i.e. in the proportion of 2 (Two) new fully paid-up equity share of Rs. 10/- (Rupees Ten Only) each for every 1 (One) existing fully paid-up equity share of Rs. 10/- (Rupees Ten Only) each.

5.5 The Hon’ble National Company Law Tribunal, Ahmedabad Bench (“NCLT”) has by vide its order dated February 22, 2018 approved the Scheme of Amalgamation of Mahendra Aluminium Company Limited (“MALCO”) with Arfin India Limited (“the Company”) and their respective shareholders and creditors. Appointed date for the scheme is April 01, 2017. As per the scheme of amalgamation, the Company has issued and allotted 10,90,200 equity shares of Rs. 10/- (Rupees Ten Only) each per share to the shareholders of MALCO towards purchase consideration.

6.1 There are no Micro, Small and Medium Enterprises, as defined in the Micro, Small, Medium Enterprises Development Act, 2006, to whom the Company owes dues on account of principal amount together with interest and accordingly no additional disclosure have been made. The above information regarding Micro, Small and Medium enterprises has been determined to the extent such parties have been identified on the basis of information available with the Company. This has been relied upon by the auditors.

7.1 Opening Inventory of Raw Materials includes Rs. 434.14 lakhs opening inventory received from MALCO on account of amalgamation during the year.

8.1 Opening Inventory of Finished Goods includes Rs. 63.12 lakhs opening inventory received from MALCO on account of amalgamation during the year.

* Litigation pertaining to Custom Tariff / Rate classification at Custom Department on interpretation of the respective law and rules thereunder. Company has filed appeals before Commissioner of Custom Appeals, Ahmedabad, against the custom demand and according to lawyer’s opinion, the Company has sufficient merit to succeed in due course of litigation. The Company has paid duty under protest for Rs. 41.30 lakhs. The Company has not provided provision for the above since as the company’s management does not consider that there is any probable loss.

9. SEGMENT REPORTING

In the opinion of the management, the Company is mainly engaged in a single segment of manufacturing & trading of non-ferrous metals and all other activities revolve around the main activity, therefore there are no separate reportable segments as per Ind AS 108 “Segment Reporting”.

10. POST RETIREMENT EMPLOYEE BENEFITS

The disclosures required under Indian Accounting Standard 19 on “Employee Benefits” are given below:

a) Defined Contribution Plans

Contribution to Defined Contribution Plan, recognized for the year are as under:

b) Defined Benefit Plans

In accordance with Indian Accounting Standard 19, actuarial valuation was done in respect to the aforesaid defined benefit plan based on the following assumptions.

Economic Assumptions

The discount rate and salary increases assumed are the key financial assumptions and should be considered together; it is the difference or gap between these rates which is more important than the individual rates in isolation.

Discount Rate

The discounting rate is based on the gross redemption yield on medium to long term risk free investments. The estimated term of the benefits / obligations works out to zero years. For the current valuation a discount rate of 7.50% p.a. (Previous Year 7.50% p.a.) compound has been used.

Salary Escalation Rate

The salary escalation rate usually consists of at least three components, viz. regular increments, price inflation and promotional increases. In addition to this any commitments by the management regarding future salary increases and the Company’s philosophy towards employee remuneration are also to be taken into account. Again a long-term view as to trend in salary increase rates has to be taken rather than be guided by the escalation rates experienced in the immediate past, if they have been influenced by unusual factors.

3.5 Effect of plan on Entity’s Future Cash Flows

3.5 (a) Funding Arrangements and Funding Policy

Not Applicable

3.7 Sensitivity Analysis: Significant actuarial assumptions for the determination of the defined benefit obligation are discount rate and expected salary increase rate. Effect of change in mortality rate is negligible. Please note that the sensitivity analysis presented below may not be representative of the actual change in the defined benefit obligation as it is unlikely that the change in assumption would occur in isolation of one another as some of the assumptions may be correlated. The results of sensitivity analysis are given below:

11. The Hon’ble National Company Law Tribunal, Ahmedabad Bench (“NCLT”) vide its order dated February 22, 2018 has approved the Scheme of Amalgamation of Mahendra Aluminium Company Limited (“MALCO”) with Arfin India Limited (“the Company”) and their respective shareholders and creditors. Appointed date for the scheme is April 01, 2017. Accordingly books of both the above Companies have been merged for preparing financial statements for the financial year 2017-18 (i.e. April 01, 2017 to March 31, 2018) after nulifying the inter Company transactions (i.e. Sale, Purchase, Expenses and Income).

12. CORPORATE SOCIAL RESPONISIBILITY

Pursuant to the provisions of section 135(5) of the Companies Act, 2013 (the Act), the Company has formed its Corporate Social Responsibility (CSR) Committee. As per the relevant provisions of the Act read with Rule 2(1)(f) of the Companies (Corporate Social Responsibility Policy) Rules, 2014, the Company is required to spend at least 2% of the average net profits (determined under section 198 of the Companies Act 2013, and section 349 of the Companies Act 1956), made during the immediately three preceding financial years. The Company has incurred the following expenditure on CSR activities during the Financial Year 2017-18:

13. DERIVATIVE INSTRUMENTS

(a) The amount of foreign currency exposures that are not hedged by a derivative instrument or otherwise as at March 31, 2018, March 31, 2017 and April 01, 2016 are as under:

14. AMALGAMATION OF MAHENDRA ALUMINIUM COMPANY LIMITED (MALCO) WITH ARFIN INDIA LIMITED (ARFIN)

Pursuant to the scheme of amalgamation under section 230 to 232 of the Companies Act, 2013, approved by Hon’ble National Company Law Tribunal, Ahmedabad Bench (NCLT) on February 22, 2018, between Arfin India Limited (the Transferee Company) and Mahendra Aluminium Company Limited (the Transferor Company, now termed as “MALCO”). Mahendra Aluminium Company Limited was merged with Arfin India Limited from the appointed date i.e. April 01, 2017.

Pursuant to the above, Transferor Company stands amalgamted with the Arfin India Limited following “Purchase Method” of accounting as per the Accounting Standard 14 “Accounting for Amalgamation”, issued by the Institute of Chartered Accountants of India, on the basis of the scheme approved by the Hon’ble National Company Law Tribunal, Ahmedabad Bench.

The business of the MALCO has been transferred to the Company on a Going Concern basis. As per the Scheme all assets and liabilities of the MALCO are recorded in the books of the Company at book value

PURCHASE CONSIDERATION

Pursuant to the approved scheme, In consideration for the transfer and vesting of the entire undertaking of the T ransferor Company with the T ransferee Company, the T ransferee Company has issued fully paid up equity shares to the shareholders of the Transferor Company as under:

“92 (Ninety Two) Equity Shares of Face Value of Rs. 10/- each as fully paid up of the Transferee Company for every 100 (Hundred) Equity Shares of the Face Value of Rs. 10/- each held in the Transferor Company.”

In consideration of amalgamation, the Transferee Company has issued 10,90,200 Equity Shares of Face Value of Rs. 10/- each as fully paid up to the shareholders of the Transferor Company.

Upon the scheme becoming effective, the authorized share capital of the Company shall automatically stand enhanced by the authorized share capital of T ransferor Company. The authorized share capital of Malco of Rs. 1,50,00,000/- divided into 15,00,000 Equity Shares of Face Value of Rs. 10/- each had been added with the Authorized Share Capital of Arfin.

The amalgamation would inter-alia achieve the following objectives as stated in the Scheme of Amalgamation:

(a) The amalgamation will consolidate the business activity and will lead to greater efficiency in the overall business and achieve integration of the business operations as well as synergy benefits through combined operations of both the entities.

(b) As the products of both the Companies are similar in nature, the contemplated amalgamation will lead to economies of scale which in turn will promote cost efficiency by means of reduction in administrative overheads, reduction in multiplicity of legal and regulatory compliances, and will help running the business more effectively and economically resulting better utilization of resources.

(c) This amalgamation will create enhanced value for shareholders and allow a focused strategy in operations, which would be in the best interest of all its shareholders, creditors and all persons connected with the Companies.

15. RELATED PARTY DISCLOSURES AS PER INDIAN ACCOUNTING STANDARD-24 (A) RELATED PARTIES

(a) KEY MANAGEMENT PERSONNEL (KMP)

Mr. Mahendra R. Shah - Chairman Mr. Jatin M. Shah - Managing Director Mrs. Pushpa M. Shah - Director

(b) RELATIVES OF KEY MANAGEMENT PERSONNEL

Ms. Pooja M. Shah - Daughter of Chairman

(c) ENTITIES CONTROLLED BY DIRECTORS OR THEIR RELATIVES (with whom transactions entered into during the financial year)

Mahendra Aluminium Company Limited - Sister Concern *

Krish Ferro Industries Private Limited - Sister Concern Mahendra Corporation - Sister Concern Metalic International - Sister Concern

* Mahendra Aluminium Company Limited has been amalgamated into Arfin India Limited. Appointed date of amalgamation is April 01, 2017. (Refer Note No. 41).

Note:

(i) The above related party transactions have been reviewed periodically by the Board of Directors of the Company vis-a-vis the applicable provisions of the Companies Act, 2013, and justification of the rates being charged / terms thereof have also been approved.

(ii) The details of guarantees and collaterals extended by the related parties in respect of borrowings of the Company have been given at the respective notes.

16. FINANCIAL INSTRUMENTS - ACCOUNTING CLASSIFICATIONS 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 values of cash and short term deposits, trade and other short term receivables, trade payables, other current liabilities, short term loans from banks and other financial institutions approximate their carrying amounts largely due to 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 counter party. Based on the 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 values 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 effects on the recorded fair value are observable, either directly or indirectly.

Level 3: Techniques which use inputs that have a significant effects on the recorded fair value that are not based on observable market data.

During the reporting period ended March 31, 2018 and March 31, 2017, there were no transfers between Level 1 and Level 2 fair value measurements.

The carrying amounts of financial assets and financial liabilities measured at amortized cost in the financial statements are a reasonable approximation of their fair values since the Company does not anticipate that the carrying amounts would be significantly different from the values that would eventually be received or settled.

17. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Company’s activities are exposed to variety of financial risks. The key financial risks include market risk, credit risk and liquidity risk. The Company’s focus is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance. The Board of Directors reviews and approves policies for managing risks. The risks are governed by appropriate policies and procedures and accordingly financial risks are identified, measured and managed in accordance with the Company’s policies and risk objectives.

MARKET RISK

Market risk is the risk of loss of future earnings, fair values or future cash flows that may result from a change in the price of a financial instrument. The value of a financial instrument may change as a result of changes in the interest rates, foreign currency exchange rates, equity prices and other market changes that affect market risk sensitive instruments. Market risk is attributable to all market risk sensitive financial instruments including investments and deposits, foreign currency receivables, payables and loan borrowings.

The Company manages market risk through a treasury department, which evaluates and exercises independent control over the entire process of market risk management. The treasury department recommends risk management objectives and policies, which are approved by the Senior Management. The activities of this department include management of cash resources, implementing hedging strategies for foreign currency exposures, borrowing strategies and ensuring compliance with market risk limits and policies.

Interest Rate Risk

Interest rate risk is the risk that fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. In order to optimize the company’s position with regards to the interest income and interest expenses and to manage the interest rate risk, treasury performs a comprehensive corporate interest rate risk management by balancing the proportion of fixed rate and floating rate financial instruments in its total portfolio.

Refer Note 17 & 21 for interest rate profile of the Company’s interest-bearing financial instrument at the reporting date.

Market Risk - Foreign Currency

The Company operates locally, however, the nature of its operations requires it to transact in several currencies and consequently the Company is exposed to foreign exchange risk in various foreign currencies. The Company evaluates exchange rate exposure arising from foreign currency transactions and the Company follows established risk management policies.

Other Price Risk

The Company is also exposed to price risk arising from investments in bonds recognized at Fair Value through Other Comprehensive Income (FVTOCI). As at March 31, 2018, the carrying value of such instruments recognized at FVTOCI amounts to Rs. 442.10 lakhs (Rs. 414.83 lakhs as at March 31, 2017 and ‘ NIL as at April 01, 2016). These being debt instruments, the exposure to risk of changes in market rates is minimal. The details of such investments in bonds are given in Note 4(II).

CREDIT RISK

Credit risk arises from the possibility that counter party may not be able to settle their obligations as agreed. To manage this, the Company periodically assesses the financial reliability of customers, taking into account the financial condition, current economic trends and analysis of historical bad debts and ageing of accounts receivable (Refer note no. 9.1). Individual risk limits are set accordingly.

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 significant increase in credit risk, the company compares the risk of a default occurring on the asset at the reporting date with the risk of default on the date of initial recognition. It considers reasonable and supportive forward-looking information such as:

(i) Actual or expected significant adverse changes in business,

(ii) Actual or expected significant changes in the operating results of the counterparty,

(iii) Financial or economic conditions that are expected to cause a significant change to the counterparty’s ability to mere its obligation.

(iv) Significant increase in credit risk on other financial instruments of the same counterparty, and

(v) Significant changes in the value of the collateral supporting the obligation or in the quality of third-party guarantees or credit enhancements.

Financial assets are written off when there is no reasonable expectation of recovery, such as a debtor failing to engage in a repayment plan with the Company. The Company categories a loan or receivable for write off when a debtor fails to make contractual payments greater than 2 years past due. Where loans or receivables have been written off, the Company continues to engage in enforcement activity to attempt to recover the receivable due. Where recoveries are made, these are recognized in profit or loss.

LIQUIDITY RISK

Liquidity Risk is defined as the risk that the company will not be able to settle or meet its obligations on time or at reasonable price. The company’s treasury department is responsible for liquidity, funding as well as settlement management. In addition, processes and policies related to such risks are overseen by the senior management. Management monitors the company’s net liquidity position through rolling forecast on the basis of expected cash flows.

Maturity Profile of Financial Liabilities

The below table provides details regarding the remaining contractual maturities of financial liabilities at the reporting date based on contractual undiscounted payments.

Capital Management

For the purposes of the Company’s capital management, capital includes issued capital and all other equity reserves. The primary objective of the Company’s Capital Management is to maximize shareholders’ value. The company manages its capital structure and makes adjustments in the light of changes in economic environment and the requirement of the financial covenants.

The company monitors capital using gearing ratio, which is total debt divided by total capital plus debt.

18.1 FIRST TIME ADOPTION OF IND AS

The company has prepared its first Financial Statements in accordance with Ind AS for the financial year ended March 31, 2018. For periods up to and including the financial year ended 31 March 2017, the Company prepared its financial statements in accordance with Indian GAAP, including accounting standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended). The effective date for Company’s Ind AS opening Balance Sheet is April 01, 2016 (the date of transition to Ind AS).

The accounting policies set out in Note 2 have been applied in preparing the financial statements for the year ended March 31, 2018, the comparative information presented in these financial statements for the year ended March 31, 2017 and in the preparation of an opening Ind AS Balance Sheet at April 01, 2016 (the Company’s date of transition). According to Ind AS 101, the first Ind AS Financial Statements must use recognition and measurement principles that are based on standards and interpretations that are effective at March 31, 2018, the date of first-time preparation of Financial Statements according to Ind AS. These accounting principles and measurement principles must be applied retrospectively to the date of transition to Ind AS and for all periods presented within the first Ind AS Financial Statements.

Any resulting differences between carrying amounts of assets and liabilities according to Ind AS 101 as of April 01, 2016 compared with those presented in the Indian GAAP Balance Sheet as of March 31, 2016, were recognized in equity under retained earnings within the Ind AS Balance Sheet.

An explanation of how the transition from previous GAAP to Ind AS has affected the company’s financial position, financial performance and cash flows is set out in the following notes and reconciliations.

I. Exemptions and exceptions availed:

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

A) 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 as recognised in the financial statements as at the date of transition to Ind AS, measured as per the Indian GAAP and use that as its deemed cost as at the date of transition after making necessary adjustments for de-commissioning liabilities. This exemption can also be used for intangible assets covered by Ind AS 38 Intangible Assets.

Accordingly, the Company has elected to measure all of its property, plant and equipment and intangible assets at their Indian GAAP carrying values.

B)Leases

Appendix C to Ind AS 17 requires an entity to assess whether a contract or arrangement contains a lease. In accordance with Ind AS 17, this assessment should be carried out at the inception of the contract or arrangement. Ind AS 101 provides an option to make this assessment on the basis of facts and circumstances existing at the date of transition to Ind AS, except where the effect is expected to be not material. The Company has elected to apply this exemption for such contracts / arrangements.

C) Estimates

An entity’s estimates in accordance with Ind ASs at the date of transition to Ind AS shall be consistent with estimates made for the same date in accordance with Indian GAAP (after adjustments to reflect any difference in accounting policies), unless there is objective evidence that those estimates were in error. Ind AS estimates as at April 01, 2016 are consistent with the estimates as at the same date made in conformity with Indian GAAP. The Company made estimates for following items in accordance with Ind AS at the date of transition as these were not required under Indian GAAP:

(i) Investment in equity instruments carried at FVPL or FVOCI;

(ii) Investment in debt instruments carried at FVOCI; and

(iii) Impairment of financial assets based on expected credit loss model.

D) Classification and Measurement 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.

E) De-recognition of financial Assets and Liabilities

Ind AS 101 requires a first-time adopter to apply the de-recognition provisions of Ind AS 109 prospectively for transactions occurring on or after the date of transition to Ind AS. However, Ind AS 101 allows a first-time adopter to apply the de-recognition requirements in Ind AS 109 retrospectively from a date of the entity’s choosing, provided that the information needed to apply Ind AS 109 to financial assets and financial liabilities derecognised as a result of past transactions was obtained at the time of initially accounting for those transactions.

F) The Company has elected to disclose the following amounts prospectively from the date of transition (Ind AS oridinarily requires the amounts for the current and previous four annual periods to be disclosed):

(i) the present value of the defined obligation, the fair value of the plan assets and the surplus or deficit in the plan; and

(ii) the experience adjustments arising on the plan liabilities and the plan assets.

18.2. RECONCILIATION

The following reconciliations provides the effect of transition to Ind AS from previous IGAAP in accordance with Ind AS 101.

(i) Equity as at April 01, 2016 and March 31, 2017

(ii) Net profit for Year ended March 31, 2017

NOTES TO FIRST TIME ADOPTION

Deferred Tax on Ind AS adjustments

IGAAP 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 IGAAP. 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 recognised in correlation to the underlying transaction either in retained earnings or a separate component of equity.

Actuarial Loss on Defined Benefit Plan

Both under IGAAP and Ind AS, the Company recognized costs related to its post-employment defined benefit plan on an actuarial basis. Under IGAAP, the entire cost, including actuarial gains and losses, are charged to profit or loss. Under Ind AS, re-measurements (comprising of actuarial gains and losses, the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit liability and the return on plan assets excluding amounts included in net interest on the net defined benefit liability) are recognized immediately in the balance sheet with a corresponding debit or credit to retained earnings through Other Comprehensive Income (OCI).

Others Sale of goods

Under the IGAAP, 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 the statement of profit and loss as part of expenses.

Other Comprehensive Income

Under Ind AS, all items of income and expense recognized in a period should be included in profit or loss for the period, unless a standard requires or permits otherwise. Items of income and expense that are not recognized in profit or loss but are shown in the statement of profit and loss as ‘other comprehensive income’ include re-measurements of defined benefit plans and fair value gains or (losses) on FVOCI equity and debt instruments and corresponding tax impact thereon. The concept of other comprehensive income did not exist under previous GAAP.

Proposed Dividend

Under the previous GAAP, Dividend proposed by the Board of Directors after the Balance Sheet date but before the approval of the Financial Statements were considered as subsequent events. Accordingly, provisions for Proposed Dividend including Distribution Tax was recognized as liability. Under Ind AS, such Dividends are recognized when the same is approved by the shareholders in the Annual General Meeting.

Statement of Cash Flows

The transition from IGAAP to Ind AS has not any material impact on the statement of cash flows.

19. During the year, interest cost of Rs. 8.44 lakhs (Previous Year Nil) on term loan has been capitalized by way of addition to Capital Work in Progress of Property, Plant and Equipments.

20. Previous year’s figures have been regrouped, reclassified and rearranged wherever considered necessary to confirm to current year presentation.

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Mar 31, 2016

1. The Company has only One Class of Ordinary Equity Shares and the Holders of these Ordinary Equity Shares are entitled to receive Dividends as and when declared by the Company. All Shares rank Equally with regard to the Company''s Residual Assets.

NOTE - 31

1. The balances in respect of Sundry Debtors, Current Liabilities and Loans and Advances are subject to confirmations and reconciliations, if any.

2. In the opinion of the Board of Directors & Management, the Current Assets, Current Liabilities, Unsecured Loans and Loans & Advances are approximately of the value stated, if realized in the ordinary course of business. The provisions for depreciation and for all known liabilities are adequate and not in excess of amounts reasonably necessary.

3. In the opinion of the management, the Company is mainly engaged in a single segment of manufacturing & trading of non ferrous metals, therefore there are no separate reportable segments as per Accounting Standard 17 on "Segment Reporting".

4. The borrowing costs capitalized during the year ended on March 31, 2016 was '' 8.02 Lacs.

5. Related Party Transaction

As per the Accounting Standard 18 on “Related Party Disclosures”, disclosure of transactions with related parties as defined therein are given below:

List of related parties with whom transactions have taken place and Nature of relationship.

a) Key Managerial Personnel (“KMP”):

- Mahendra R. Shah - Chairman

- Jatin M. Shah - Managing Director

- Pushpa M. Shah - Director

b) Enterprises significantly influenced by the Directors and or their relatives

- Mahendra Aluminium Company Limited - Sister Concern

- Krish Ferro Industries Private Limited - Sister Concern

- Mahendra Corporation - Sister Concern Transactions with Related Parties during the year

The following transactions were carried out with the Related Parties in the ordinary course of business.

6. The estimated rate of escalation in salary, if any, is considered in actuarial valuation which takes into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment market. The above information is certified by the actuary.

7. The Company has not received information from the suppliers regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006. Hence, disclosure, if any, relating to amount 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.

8. In the opinion of the Board, Current Assets and Loans & Advances have a value of the least equal to the amounts shown in the Balance Sheet, if realized in the ordinary course of business. The provisions for all known liabilities are adequate and not in excess of amount considered reasonably necessary.

9. For the year ended on March 31, 2016, the Board of Directors of the Company has recommended a Final Dividend of '' 1.50 (i.e. 15%) Per Equity Share (Previous Year '' 1/- Per Equity Share i.e. 10%) to the Equity Shareholders. Dividend, if approved, at the ensuing Annual General Meeting, will be paid / credited to those members whose names appear on the Company’s Register of Members on Record Date.

10. Previous year’s figures have been regrouped, reclassified & rearranged wherever considered necessary.

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Mar 31, 2015

1. The balances in respect of Sundry Debtors, Current Liabilities and Loans and Advances are subject to confirmations and reconciliations, if any.

2. In the opinion of Board of Directors & Management, the Current Assets, Current Liabilities, Unsecured Loans, Loans and Advances are approximately of the value stated, if realized in the ordinary course of business. The Provisions for depreciation and for all known liabilities are adequate and not in excess of amounts reasonably necessary.

3. In the opinion of Management, the Company is mainly engaged in a single segment of manufacturing & trading of non ferrous metals, therefore there are no separate reportable segments as per Accounting Standard (AS-17) "Segment Reporting".

4. Related Party Transaction

As per Accounting Standard 18 on "Related Party Disclosures", disclosure of transactions with related parties as defined therein are given below.

List of related parties with whom transactions have taken place and Nature of relationship. a) Key Management Personnel ("KMP"):

- Mahendra R. Shah - Whole Time Director

- Jatin M. Shah - Managing Director

- Riddhi N. Shah - Company Secretary

5. Employee Benefits

a) Defined Benefit Plan

No Liability in respect of present or future liability of gratuity has been ascertained and provided in the accounts (Previous Year – Not ascertained and provided for).

6. The Company has not received information from the suppliers regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006. Hence, disclosure, if any, relating to amount 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.

7. In the opinion of the Board, Current Assets and Loans & Advances have a value of the least equal to the amounts shown in the Balance Sheet, if realized in the ordinary course of business. The provision for all known liabilities is adequate and not in excess of amount considered reasonably necessary.

8. For the Financial Year Ended March 31, 2015 the Board of Directors of the Company have recommended a dividend of Rs, 1/- (10%) Per Share (2014: Rs, Nil) to Equity Shareholders. Dividend, if approved, at the ensuing Annual General Meeting, will be paid / credited to those members whose names appear on the Company's Register of Members on Record Date.

9. Previous year's figures have been regrouped, reclassified & rearranged wherever considered necessary.

10. Expenditure incurred on employees who were in receipt of not less than Rs, 60,00,000/- per year if employed throughout the year and Rs, 5,00,000/- per month if employed for a part of a month: Rs, NIL

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Mar 31, 2014

1. The Company has only One Class of Ordinary Equity Shares and the Holders of these Ordinary Shares are entitled to receive Dividends as and when declared by the Company. All Shares rank Equally with regard to the Company''s Residual Assets.

2. The balances in respect of Sundry Debtors, Current Liabilities and Loans and Advances are subject to confirmations and reconciliation if any.

3. In the opinion of Board of Directors & Management, the Current Assets, Current Liabilities, Unsecured Loans, Loans and Advances have been approximately of the value sated, if realized in the ordinary course of business. The Provisions for depreciation and for all known liabilities are adequate and not in excess of amounts reasonably necessary.

4. As the company operates in a single segment, Accounting Standards 17 on Segment Reporting is not applicable.

5. Related Party Transaction

As per Accounting Standard 18 on "Related Party Disclosures": disclosures of transactions with related parties as defined therein are given below.

List of related parties with whom transactions have taken place and Nature of relationship.

a) Key Management Personnel ("KMP"):

* Mahendra R Shah - Director

* Jatin M Shah - Director

* Pushpaben M Shah - Director

* Shantilal Mehta - Additional Director

b) Relatives of "KMP"

* Pooja M Shah - Daughter of Mahendra R Shah

* Deepchand R Shah - Brother of Mahendra R. Shah

* Rani J Shah - Wife of Jatin M Shah

c) Enterprises significantly influenced by Directors and or Their relatives Mahendra Aluminium Company Limited - Associate Companies Krish Ferro Industries Limited

Mahendra Corporation Sakar Industries Ltd

Transactions with Related Parties during the year

The following transactions were carried out with the Related Parties in the ordinary course of business.

a) Details of Related Party Transaction with "KMP":

Rs. in Lacs

Particulars 2013-14 2012 - 13

Directors Remuneration 16.8 14.4

b) Details of Related Party Transaction with Relatives of "KMP" & Associates:

6. Employee Benefits

a) Defined Benefit Plan

No Liability in respect of present future liability of gratuity has been ascertained and provided in the accounts (Previous Year-Not ascertained and provided for). This is in contravention with the accounting standard 15 issued by the ICAI, in respect of accounting for retirement benefits.

b) Defined Contribution Plan

The Company has recognized the following amount in Profit & Loss Account which is included under contribution to funds.

Rs. in Lacs Particulars 2013-14 2012 - 13

Contribution to Provident Fund 3.27 2.51

7. The Company has not received information from the suppliers regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006. Hence, disclosure, if any relating to amount 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.

8. Investment of the company has been considered by the management to be of long-term nature and hence they are valued at cost of acquisition. In respect of quoted investments where the market value is lower than the acquisition cost, no provision is made for diminution in the value of such investments, since in the opinion of the board it is a temporary phenomenon and no provision is necessary.

9. In the opinion of the Board, Current Assets, Loans and Advances have a value of the least equal to the amounts shown in the Balance Sheet, if realized in the ordinary course of business. The provision for all known liabilities is adequate and not in excess of amount considered reasonably necessary.

10. Previous year''s figures have been regrouped, reclassified & rearranged wherever considered necessary.

11. Expenditure incurred on employees who were in receipt of not less than Rs.24,00,000/- per year if employed throughout the year and Rs. 2,00,000/- per month if employed for a part of a month Rs. NIL