Notes to Accounts of Newmalayalam Steel Ltd.

Mar 31, 2025

3.7 Terms / Rights attached to Equity Shares

The company has only one class of equity share having par value of Rs.10 per share. Each holder of the equity share is entilted to one vote per share. Whenever the company declares dividend it will be paid in Indian Rupees.

In the event of liquidation of the Company, the holders of Equity Shares will be entitled to receive any of the remaining assets of the Company, after distribution of all preferential amounts. However, no such preferential amounts exist curently. The distribution will be in proportion to the number of Equity Shares held by the Shareholders.

27	Contingent Liabilities and Commitments		( ? in Lakhs )
	Particulars	Figures as at the End of Current Reporting Period	Figures as at the End of Previous Reporting Period
	Claims against the Company not acknowledged as debts ( Refer note 1 & 2 below)
	Income Tax	300.77	-
	Goods & Service Tax	4.75	4.75

29 Title deeds of Immovable Property not held in name of the Company

The company does not own the land on which its Buildings, Plant & machinery and Other Assets are situated. The land is leased from Mr.Vazhappily Davis Varghese ,Managing Director of the company and Mrs Molly Varghese ,the Director of company as per the lease agreement dated 2nd June 2017 for a period of 15 years.

The title deeds for the land are held by V D Varghese and Molly Varghese. All buildings and related assets, including plant and machinery situated on the leased land, are owned by the company and disclosed under "Property, Plant, and Equipment (PPE)" in the financial statements.

30 Revaluation of Property, Plant, and Equipment (PPE)

The company has not carried out any revaluation of its Property, Plant, and Equipment during the period.

31 Relationship with Struck off Companies:

The company does not have any transactions or balances with companies that have been struck off by the Registrar of Companies during the period.

32 The company does not hold any benami property, and no proceedings have been initiated or are pending against the company under the ''Prohibition of Benami Property Transactions Act, 1988''.

List 1

1) 19.33 Ares of land in the name of Smt Molly Varghese W/o Varghese V D, in SY no 155/2 at Perambra Village in Chalakudy Taluk

2) 28.34 Ares of land in the name of M/s Newmalayalam Steel P Ltd in Sy no 388/1-2p, 388/4-3p, 388/5-3p, 388/3-3p, 388/3-2p, 388/4-2p, 388/5-2p, situated at PoyyaVillage, Kodungallur Taluk

3) 56.33 Ares of land in the name of Shri Varghese V D S/o Davis V V in Sy No 571/1 situated at Poyya Village, Kodungalloor Taluk

List 2

1) 107.85 Ares - Shri V D Varghese, Sy. No. 262/3-30, Pallipuram Village, Kodungallur Taluk

2) 87.61 Ares - Smt. Molly Varghese, Sy. No. 262/3-29, Pallipuram Village, Kodungallur Taluk

List 3

V D Varghese, Cyriac Varghese, Molly Varghese, Mahendra Kumar Jain, Divya Kumar Jain, Ankur Jain List 4

V D Varghese, Cyriac Varghese, Molly Varghese, Mahendra Kumar Jain, Divya Kumar Jain, Suman Jain

The difference between stock value as per books and the stock statement submitted to the bank is due to the inclusion of supplier advances under "stock in transit" in the bank statement. These advances represent materials that have been ordered and are in the process of being delivered. As per accounting standards, such advances are recorded under ''Advances to Suppliers'' in the books until physical receipt of goods. However, for the puipose of bank reporting, they are included under "stock in transit" to reflect the committed inventory in transit, leading to a temporary variance between the two figures.

Minor differences in Debtors may arise due to account reconciliations, credit notes, or corrections that occur after the date of submission of the bank statement.

38 Disclosure regarding undisclosed income

There are no undisclosed income or credits identified or discovered during the period.

39 Disclosure regarding details of crypto currency or virtual currency:

The company has not dealt in, held, or transacted any cryptocurrency or virtual currency during the period.

40 No scheme of Arrangements has been approved by competent authority in terms of sections 230 to 237 of the Companies Act,2013 in respect of the Company.

41 The company has not provided nor taken any loan or advance to/from any other person or entity or invested any funds or provided any guarantee or security with the understanding that benefit of the transaction will go to a third party, the ultimate beneficiary.

Net Profit after tax for the year has been used as the numerator and number of shares has been used as denominator for calculating the basic and diluted earnings per shares.

48 The Directors have waived off their right to claim the sitting fees for the all Meeting attended by them except in the case of independent directors

49 There are no indications of impairment on any individual cash generating assets or on cash generating units in the opinion of management and therefore no test of impairment is carried out.

50 All the known income and expenditure and assets and liabilities have been taken into account and that all the expenditure debited to the profit and loss account have been exclusively incurred for the purpose of the company’s business.

51 Balance in the accounts of debtors, creditors and advances are subject to confirmation/ reconciliation/adjustment from the respective parties.

The Company has established an Employees’ Gratuity Fund under the name ofNewmalayalam Steel Private Limited Employees Group Gratuity Fund Trust effective from 01/04/2022. The trust has been approved under Part C of the Fourth Schedule to the Income Tax Act, 1961, on 28/06/2023.

The scheme provides a lump sum payment to eligible employees at retirement, death, incapacitation, or termination of employment, based on the last drawn salary and completed years of service, subject to a vesting period of 5 years.

As per the actuarial valuation conducted in accordance with AS 15 (Revised) as at 31st March 2025, the following disclosures are made:

Subsequently, the Panchayath received government funding for the same project, and the Company dropped its original plan. Therefore:

• ^14.00 Lakhs (FY 2022-23 obligation) was utilized during FY 2024-25 on alternate eligible CSR activity as a contribution to Jaihind Foundation (CSR Reg No. CSR 00025823).

• The unspent CSR amount of ^17.80 lakhs, pertaining to the FY 2023-24 obligation, has been earmarked for a new housing project aimed at supporting the local community residing in and around the company’s operational area in Poyya, Thrissur. The project falls under the ‘rural development’ and ‘measures for reducing inequalities faced by socially and economically backward groups’ categories of Schedule VLI.The initiative was duly approved by the CSR Committee at its meeting held on 19th March 2025, and later by the Board at the meeting held on the same day. The amount continues to be maintained in the CSR Unspent Account and is scheduled to be utilized in the upcoming financial year.

• Further, an additional amount of ^15.20 lakhs relating to the FY 2024-25 proposed contribution for the above mentioned housing project was deposited into the CSR Unspent Account on 23-05-2025. There was a delay in depositing the said amount in accordance with the timeline prescribed under Section 135(6) of the Companies Act, 2013.,which was subsequently addressed on May 23rd 2025.

C. Reconciliation of CSR Unspent Account Balance

During the year, the following banking transactions occurred in the CSR Unspent Account (A/c No. 41871051866 maintained with SBI):

Bank charges of ^568.67 were debited by the bank as service charges.

An incorrect charge of ^7,139.00 was debited in error but was reversed by the bank on 08/05/2025.

A cheque of ^14.00 lakhs dated 27/03/2025, issued towards alternate eligible CSR activities (FY 2022-23 obligation), was realised only on 16/05/2025 due to processing delays at the beneficiary''s end.

The Company has verified that the final balance in the CSR Unspent Account is accurate and reflects all these movements appropriately.

58 Whistleblower Complaints

The company has not received any whistleblower complaints during the period. No frauds had been noticed by or reported to the Company.

59 Wilful Defaulter

The company is not declared as a wilful defaulter by any Bank or Financial Institution or other lenders.

60 The company earned commission income of ?375 lakh as part of its operating revenue. This commission income forms part of the sale of goods and services (Note 18), which amounts to ^30,612.64 lakh for the period.

61 Compliance with number of layers of Companies

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, and there are no companies beyond specified layers.

62 Utilisation of borrowings availed from banks and financial institution

The borrowings availed by the Company from banks and financial institutions during the year have been applied solely for the purposes for which they were sanctioned, in accordance with the terms and conditions of the respective loan agreements.

---

Mar 31, 2024

b. The Company has filed suit against Kerala Financial Corporation with respect to the demand of Rs. 11 lakhs as pre-closure charges on the term loans. As per the interim order of High Court of Kerala the above mentioned amount has been transferred to Kerala Financial Corporation as security deposit.

3. Some of the balances in Trade Receivables, Trade Payables and Loans and Advances are subject to confirmation.

4. The Company has not recorded any transaction in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961)

9. The company has no immovable property (other than properties where the Company is the lessee and the lease agreements are duly executed in favor of the lessee) whose title deeds are not held in the name of the company.

10. The Company has not revalued its Property, Plant and Equipment during the year and Companies (Registered Valuers and Valuation)/

Rules, 2017 is not applicable during the year. jj

b. There is no capital-work-in progress, whose completion is overdue or has exceeded its cost compared to its original plan.

c. There is no Intangible assets under development by the company during the year.

13. Disclosures required under section 22 of the Micro, Small and Medium Enterprises Development Act, 2006:

Note: Dues to Micro and Small Enterprises have been determined to the extent such parties have been identified on the basis of information collected by the management.

CALICUT, rm

14. 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 during the year.

15. The company is not declared as a willful defaulter by any bank or financial institution or other lender during the year.

16. The company has no transactions with companies struck off under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956.

17. No charges or satisfaction are yet to be registered with Registrar of Companies beyond the statutory period during the financial year.

18. The number of layers prescribed under clause (87) of section 2 of the Act read with Companies (Restriction on number of Layers) Rules, 2017 is not applicable for the company during the year.

19. The company has not entered any Scheme of Arrangements during the year and sections 230 to 237 of the Companies Act, 2013 is not applicable to the company.

20. The company has not advanced or loaned or invested funds (either borrowed funds or share premium or any other sources or kind of fimds) to any other person(s) or entity(ies), 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 by or on behalf of the company (Ultimate Beneficiaries) or provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

21. The company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) 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 by or on behalf of the Funding Party (Ultimate Beneficiaries) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

22. The company has used the borrowings from banks and financial institutions for the specific purpose for which it was taken at the balance sheet date.

23. The Company has established an Employees’ Gratuity Fund under the name of Newmalayalam Steel Private Limited Employees Group Gratuity Fund Trust effective from 01/04/2022. The trust has been approved under Part C of the Fourth Schedule to the Income Tax Act, 1961, on 28/06/2023. As of 31/03/2023, the Company had created a provision for gratuity amounting to ?62.33 Lakhs based on the valuation report provided by Life Insurance Corporation of India (LIC). On 30th October 2023, the Company made a payment of ?62.33 Lakhs to the Gratuity Trust as part of its funding obligations towards the defined benefit plan.

Actuarial valuation requires a provision for gratuity of Rs. 43.47 Lakhs as on 31.03.2024 whereas the provision for the same was made for Rs. 62.33 Lakhs during the financial year 2022-2023 which resulted in an extra provision amounting to Rs. 18.86 Lakhs. During the current year the same was considered as Income from excess provision of gratuity amounting to Rs. 18.86 Lakhs.

The fund value of Newmalayalam Steel Private Limited Employees Group Gratuity Fund Trust with LIC as on 31/03/2024 is 64.38 Lakhs.

The company has not spent the current year CSR fund of Rs 17.75 Lakhs. On 23/01/2023 company received a request letter from Poyya Grama Panchayath with respect to a proposal of drinking water facility which will benefit the people around the company. Company has decided to contribute an amount required for the purchase of land for this project by accumulating the CSR funds under section 135 for the FY 2022-23, FY 2023-24 & FY 2024-25. Following amounts are deposited with SBI CSR Deposit with respect to above mentioned project.

(a) The company has no related party transactions for CSR activities during the year.

(b) The company has not made any provision with respect to a liability incurred by entering into a contractual obligation for CSR activities during the year.

The Company has decided to sub-divide the existing face value ofRs 1000/- to Rs 10/- in its Extra Ordinary General Meeting held on 04 th November 2023. Consequent to the sub division the number of paid up shares increased from 1,26,476 to 1,26,47,600. This increase will be reflected in the EPS calculation as well and the same would be reduced due to the increase in the number of shares.

The subdivision has resulted in a major increase in the change in shareholding percentage of the promoters.

Primary Security

1 .GECL Loans - Hypothecation charge over Stocks and Receivables 2.SBI Solar Loan - Hypothecation of Solar Panel and related equipments

3. Vehicle Loans - Hypothecation of Eicher Truck & Car

4. SBITerm Loans -

(I) Hypothecation of Plant & Machinery

(II) Equitable Mortgage over following immovable properties

a. 107.85 ares of land in the name of Sri Varghese V D S/o Davis V V in Sy No 262/3-30 at Pallipuram Village, Kodungallur Taluk.

b. 87.61 ares of land in the name of Smt Molly Varghese W/o Varghese V D in Sy No 262/3-29 at Pallipuram Village, Kodungallur Taluk.

Collateral Security

1 SB1 solar Loan and GECL Loans -

Equitable Mortgage over following immovable properties

a. 19.33 Ares of land in the name of Smt Molly Varghese W/o Varghese V D, in SY no 155/2 at Perambra Village in Chalakudy Taluk

b. 28.34 Ares of land in the name ofM/s Newmalayalam Steel P Ltd in Sy no 388/l-2p, 388/4-3p, 388/5-3p, 388/3-3p, 388/3-2p, 388/4-2p, 388/5-2p, at Poyya Village, Kodungallur Taluk.

c. 56.33 Ares of land in the name of Shri Varghese V D S/o Davis V V inSy No 571/1 situated at Poyya Village, Kodungalloor Taluk

Primary Security

l .Cash Credit and GECL Loans - Hypothecation charge over Stocks and Receivables 2.SBI Solar Loan - Hypothecation of Solar Panel and related equipments

3. Vehicle Loans - Hypothecation of Eicher Truck & Car

4. SBI Term Loans -

(I) Hypothecation of Plant & Machinery

(II) Equitable Mortgage over following immovable properties

a. 107.85 ares of land in the name of Sri Varghese V D S/o Davis V V in Sy No 262/3-30 at Pallipuram Village, Kodungallur Taluk.

b. 87.61 ares of land in the name of Smt Molly Varghese W/o Varghese V D in Sy No 262/3-29 at Pallipuram Village, Kodungallur Taluk.

Collateral Security

1 .Cash Credit, SBI solar Loan and GECL Loans -Equitable Mortgage over following immovable properties

a. 19.33 Ares of land in the name of Smt Molly Varghese W/o Varghese V D, in SY no 155/2 at Perambra Village in Chalakudy Taluk b. 28.34 Ares of land in the name of M/s Newmalayalam Steel P Ltd in Sy no 388/l-2p,

Kodungallur Taluk.

c. 56.33 Ares of land in the name of Shri Varghese V D S/o Davis V V inSy No 571/1 situated at Poyya Village, Kodungalloor Taluk

All SBI Credit facilities are secured by Personal Guarantee of Shri. V D Varghese,Shri. Cyriac Varghese, Smt. Molly Varghese, Shri. Mahendra Kumar Jain, Shri. Divya Kumar Jain,Smt Suman Jain.