Notes to Accounts of Kalana Ispat Ltd.

Mar 31, 2026

(ii) Rights, preferences and restrictions attached to shares

Equity Shares: The Company has one class of equity shares. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

Convertible Equity Warrants (“Warrants") :

The Company, pursuant to a special resolution passed at the Extra-Ordinary General Meeting held on March 27, 2026, approved issuance of up to 45,00,000 Convertible Equity Warrants (“Warrants") on a preferential basis to persons belonging to the Promoter and Promoter Group category, at an issue price of Rs. 22.50 per Warrant (including premium of Rs. 12.50 per Warrant), aggregating up to Rs. 1,012.50 Lakhs.

Each Warrant carries a right exercisable by the holder to subscribe to 1 (One) Equity Share of face value of Rs. 10 each against each Warrant within a period of 18 months from the date of allotment, in accordance with the applicable provisions of Chapter V of the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018.

Since no Warrants were allotted during the year ended March 31, 2026, no funds were raised by the Company through such preferential issue. Consequently, there were no outstanding potential equity shares as at the reporting date and therefore the proposed warrants have not been considered for the purpose of computation of diluted earnings per share in accordance with Accounting Standard (AS) 20 - Earnings Per Share."

Additionally Secured by way of registered mortage of industrial land and factory building situated at Sr no 4/1, Nr. GEB Substation, B/h Meghmani Factory, Kalana Road, Moje.Village Kalana, Tal. Sanand, Dist: Ahmedabad owned by the company and Residential Tanament No. C/2(ad-mesuring 59 sqyd), situated at SyNo. 19 paiki, Panchyat No. 3395/C/2, Bhagyakunj Co-op Housing Society Ltd., Jannatual Naim Society, B/h. Park land Society, Juhapura-Sarkhej Road, Juhapura, Dist-Ahmedabad reigstered in the name of Zakirbhai N Qureshi, relative of Ex-director of the company.

Lien on Fixed Deposits of Rs 32.00 Lakhs and Rs 33.00 Lakhs with interest accrued thereon.

Personal Guarantee of Mr Sadik Nannabhai Qureshi, Mr Varghese Joseph Pottakerry, Mr Zakir Nannabhai Qureshi, Mr Gurubaxsing Bagga, Mr Aftab . S. Khandwawala.

A. Land consists of two land namely

1. Factory Land located at Survey No.4/1/A Village:Kalana, Tal: Sanand, Dist: Ahmedabad,Gujarat

2. Factory land located at Survey No.452, Khata no. 280, Khegariya, Taluka - Viramgam, District-Ahmedabad,Guiarat for porposed Rolling Mill proiect.

B. The company has not revalued its Property, Plant and Equipment during the year.

c) Capital Work-in-Progress as at March 31, 2026 comprises expenditure incurred towards Plant and Machinery and Factory Shed under construction relating to the Rolling Mill Project, which are pending completion and capitalization.

(d) The company has lease rights over the Land situated at Survey No. 151 and Survey No. 174, Taluka: Bhabhar, District: Banaskantha, Gujarat has been taken on lease by the Company for a period of 29 years and 6 months with effect from November 18, 2024. The land is being used for installation and operation of a 1.4 MW Ground Mounted Solar Power Plant intended for captive consumption for the Company''s existing manufacturing operations located at Survey No.4/1/A Village:Kalana,Tal: Sanand, Dist: Ahmedabad.

Statutory Impact of New Labour Code

The Government of India has notified the Code on Wages, 2019, the Industrial Relations Code, 2020 the Code on Social Security, 2020 and the Occupational Safety, Health and Working Conditions Code, 2020 ("Labour Codes") with effect from 21 November 2025, which consolidates 29 existing labour laws. The Labour Codes, amongst other things, introduced changes including a uniform definition of wages and enhanced benefits relating to leaves. In accordance with the guidance issued by the Institute of Chartered Accountants of India and based on the Actuarial Valuation, the Company has assessed the impact and accounted the impact of these regulatory changes to these standalone financial statement for the year ended March 31,2026.

The Government is in the process of notifying the related rules under the New Labour Codes. The impact of these rules will be evaluated and accounted for in accordance with the applicable Accounting Standards in the period in which they are notified.

Since no Warrants were allotted during the year ended March 31, 2026, no funds were raised by the Company through such preferential issue. Consequently, there were no outstanding potential equity shares as at the reporting date and therefore the proposed warrants have not been considered for the purpose of computation of diluted earnings per share in accordance with Accounting Standard (AS) 20 - Earnings Per Share." * (i) Contingent liability State tax - Gujarat (VAT) Liability amounting Rs 42.52 Lakhs for FY 2015-16 for which state officer has passed the order for the said demand dated 06.11.2020 against which the company has preferred first appeal, the said appeal is dismissed due to non deposit of Rs 7.25 Lakhs. Against this order company preferred Second Appeal , The said Appeal Authority have directed to remand back to First Appeal Authority on the payment of Rs 1.50 Lakhs and accordingly company has deposited the said amount. The disposal of the same matter at first Appeal is pending.

During the FY 2023-24, the debit note issued to following Raw Material suppliers for inferior quality supply, the effects for the same given in books of accounts of the company. However, the suppliers had not accounted the said debit note in their respective books of accounts on verification of balance confirmation. The said matter is under negotiation, no legal action taken by the company till date.

The Modification in the allocation of funds was approved by the shareholders through a special resolution passed via postal ballot through e- voting concluded on March 19, 2025. Variation in the amount of object for which fund originally allocated as stated in the prospectus of the Company dated September 12, 2024. However, there is no deviation or variation in the utilization of the funds raised as of March 31, 2026.

Explanation for the Variation : The company at the time of initial public offer had proposed to install the 4 MW DC and 3.5 MW AC Ground Mounted Solar Power Plant. However, due to change in provision of electricity (Promoting renewable energy through Green Energy open Access) Rules, 2022-regarding Ref:- (1) MoP notification No- 23.09.2021 R&R dtd. 21.08.2024 via letter no. GUVNL/0079/08/2024 under clause8(2) of rules 2022 issued by Gujarat Urja Vikas Nigam Limited regarding the consumption capacity from "The permitted quantum of banked energy by the green energy open access consumers shall be at least 30.00% of total consumption of electricity from the distribution licensee by the consumers during the billing period" to "Permitted quantum of banked energy by the green energy open access consumers shall be maximum upto 30.00% of total consumption of electricity from the distribution licensee by the consumers. Due to the above said changes, the maximum consumption of the electricity is upto 30.00% only. therefore, the company has now proposed to install 1.4 MW Ground Mounted Solar Power Plant for existing manufacturing plant and 1MW Ground Mounted Solar Power Plant for the proposed rolling mill as mentioned in object no.02. Further, the board has also received the revised quotation from Solar Energy Private Limited for installation of solar Plant of Rs. 1103.65 (In lakhs) which costs company less than the earlier quoted for installation of Solar Plant. In Continuation, the Board intends to use Rs. 1195.10 (i.e. deviated amount) of above-mentioned object no.01 in object no.02 (i.e. Capital expenditure for setting up of rolling mill at Survey No.452, Khata no. 280, Khegariya, Taluka - Viramgam, District-Ahmedabad by construction of the industrial Shed, purchase of equipment/machineries, other assets etc.)

42 Security of Current Assets Against Borrowings

During the year, the company has renewed its credit facilities the aggregated sanctioned amount of Rs 997.00 Lakhs on the basis of security of current assets from the bank.

43 Details of Benami Property held

No proceedings have been initiated or pending against the company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and the rules made thereunder.

44 Wilful Defaulter

The company has not been declared as a wilful defaulter by any bank or financial institution or other lender.

45 Relationship with Struck off Companies

The company has not entered any transactions with struck off companies under section 248 of the companies Act, 2013 or section 560 of companies Act, 1956.

46 Registration of Charge

The company had complied with requirement of registration of charges with Reglstrar of Companies in respect of borrowings from the bank for company''s assets.

The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.

There are no charges or satisfaction thereof pending for registration with the Registrar of Companies beyond the statutory period prescribed under the Companies Act, 2013.

Reasons for Variances

a) The ratio decreased as IPO funds unutilised amount included in Previous Year''s in Current Assets, is utilised in Current Year.

c) The ratio decreased due to slight decrease in currebt year Earnings simultenously increase in Debt service as compared to previous year.

d) The ratio decreased due to increase in average share holders equity due to IPO in previous year simultenously slight decrease in profit during the current year as compared to previous year.

f) The ratio increased due to better receivable management as compared to previous year .

49 Disclosure where company has given loan or invested to other person or entity to lend or invest in another person or entity

No funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the company to or in any other persons or entities, including foreign entities ("Intermediaries") with the understanding, whether recorded in writing or otherwise, that the Intermediary shall directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever (Ultimate beneficiaries) by or on behalf of the company or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

50 Disclosure where company has received fund from other person or entity to lend or invest in other person or entity

No funds have been received by the Company from any persons or entities, including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever ("Ultimate Beneficiaries") by or on behalf of the Funding Parties or provide any guarantee, security or the like from or on behalf of the Ultimate Beneficiaries.

51 Undisclosed Income

There are no transactions that are not recorded in the books of account to be surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961.

52 Details of Crypto Currency

The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.

53 Other Statutory Disclosures as per the Companies Act, 2013

1. There is no Scheme of Arrangements that has been approved in terms of sections 230 to 237 of companies Act, 2013.

2. The Company has not obtained any borrowings from banks or financial institutions during the year ended March 31, 2026 for specific purposes. Accordingly, disclosure requirements relating to utilization of such borrowings do not arise.

54 Subsequent Events

There is no adjusting event occurred between reporting date and date of signing the financial statements.

55 Regrouping

Previous year''s figures have been regrouped and re-arranged whenever necessary to suit the current year''s figures.

56 Approval of financial statements

The financial statements for the year ended March 31,2026 were approved by the Board of Directors on May 14, 2026.

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Mar 31, 2025

Issue of 49,38,000 Share by way of IPO at a Issue Price of Rs.66 for the year ended March 31,2025.

Issue of 4,07,407 shares by way of Right Issue at a Issue Price of Rs.81 and Issue of 92,813 shares pursuant to Conversion of loan taken from the promoter at a Issue Price of Rs.81 and Issue of 66,00,965 shares by way of bonus for capitalization of Reserves for the year ended March 31,2024.

(ii) Rights, preferences and restrictions attached to shares

Equity Shares: The Company has one class of equity shares. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

Note A : Secured against Hypothecation of entire Stock and book debts not older than 90 days.

Additionally Secured by way of registered mortage of industrial land and factory building situated at Sr no 4/1, Nr. GEB SubStation, B/h Meghmani Factory, Kalana Road, Moje.Village Kalana, Tal. Sanand, Dist: Ahmedabad owned by the company and Residential Tanament No. C/2(ad-mesuring 59 sqyd), situated at SyNo. 19 paiki, Panchyat No. 3395/C/2, BhagyakunjCo-op Housing Society Ltd., Jannatual Naim Society, B/h. Park land Society, Juhapura-SarkhejRoad, Juhapura, Dist-Ahmedabad reigstered in the name of Zakirbhai N Qureshi, relative of Ex-director of the company.

The Modification in the allocation of funds was approved by the shareholders through a special resolution passed via postal ballot through e- voting concluded on March 19, 2025. Variation in the amount of object for which fund originally allocated as stated in the prospectus of the Company dated September 12, 2024. However, there is no deviation or variation in the utilization of the funds raised as of March 31, 2025.

Explanation for the Variation : The company at the time of initial public offer had proposed to install the 4 MW DC and 3.5 MW AC Ground Mounted Solar Power Plant. However, due to change in provision of electricity (Promoting renewable energy through Green Energy open Access) Rules, 2022- regarding Ref:- (1) MoP notification No- 23.09.2021 R&R dtd. 21.08.2024 via letter no. GUVNL/0079/08/2024 under clause8(2) of rules 2022 issued by Gujarat Urja Vikas Nigam Limited regarding the consumption capacity from "The permitted quantum of banked energy by the green energy open access consumers shall be at least 30.00% of total consumption of electricity from the distribution licensee by the consumers during the billing period" to "Permitted quantum of banked energy by the green energy open access consumers shall be maximum upto 30.00% of total consumption of electricity from the distribution licensee by the consumers. However, Due to the above said changes, the maximum consumption of the electricity is upto 30.00% only. therefore, the company has now proposed to install 1.4 MW Ground Mounted Solar Power Plant for existing manufacturing plant and 1MW Ground Mounted Solar Power Plant for the proposed rolling mill as mentioned in object no.02. Further, the board has also received the revised quotation from Solar Energy Private Limited for installation of solar Plant of Rs. 1103.65 (In lakhs) which costs company less than the earlier quoted for installation of Solar Plant. In Continuation, the Board intends to use Rs. 1195.10 (i.e. deviated amount) of above-mentioned object no.01 in object no.02 (i.e. Capital expenditure for setting up of rolling mill at Survey No.452, Khata no. 280, Khegariya, Taluka - Viramgam, District-Ahmedabad by construction of the industrial Shed, purchase of equipment/machineries, other assets etc.)

40 Details of Benami Property held

No proceedings have been initiated or pending against the company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and the rules made thereunder.

41 Relationship with Struck off Companies

The company has not entered any transactions with struck off companies under section 248 of the companies Act, 2013 or section 560 of companies Act, 1956.

42 Registration of Charge

The company had complied with requirement of registration of charges with Reglstrar of Companies in respect of borrowings from the bank for

company''s assets

43 Compliance with number of layers of comapanies

The company has complied with the number of layers prescribed under clause (87) of section 2 of the Act read with Companies (Restriction on number of Layers) Rules, 2017.

Reasons for Variances

a) The ratio increased as Current Assets includes cash and cash equivalent which also having IPO funds balance in current year

b) The ratio improved due to increase in Equity funds by way of IPO during the current year and reduction in Debt as compared to previous year.

d) The ratio decreased due to increase in average share holders equity by way of IPO during the current year and also decrease in profit during the current year as compared to previous year

f) The ratio decreased due to lower average receivables compared to sales in current year

h) The ratio decreased as the average working capital is higher during current year as compared to previous year as it includes unutilised IPO funds as Cash and cash equivalent Balance

i) The ratio decreased due to lower turnover and profit during the year as compared to previous year

j) The ratio decreased due to lower profit during the current year as compared to previous year and also higher capital employed with IPO fund pending for utilisation during the current year

45 Disclosure where company has given loan or invested to other person or entity to lend or invest in another person or entity

No funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the company to or in any other persons or entities, including foreign entities ("Intermediaries") with the understanding, whether recorded in writing or otherwise, that the Intermediary shall directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever (Ultimate beneficiaries) by or on behalf of the company or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

46 Disclosure where company has received fund from other person or entity to lend or invest in other person or entity

No funds have been received by the Company from any persons or entities, including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever ("Ultimate Beneficiaries") by or on behalf of the Funding Parties or provide any guarantee, security or the like from or on behalf of the Ultimate Beneficiaries.

47 Undisclosed Income

There are no transactions that are not recorded in the books of account to be surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961.

48 Details of Crypto Currency

The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.

49 Other Statutory Disclosures as per the Companies Act, 2013

There is no Scheme of Arrangements that has been approved in terms of sections 230 to 237 of companies Act, 2013.

50 Subsequent Events

There is no adjusting event occurred between reporting date and date of signing the financial statements.

51 Regrouping

Previous year''s figures have been regrouped and re-arranged whenever necessary to suit the current year''s figures.