Shankara Building Products Ltd. के अकाउंट के लिये नोट

Mar 31, 2025

2.14 Provisions, contingent liabilities and contingent assets

Provisions are recognised when the company has a present obligation (legal or constructive), as a result of past events, and it is probable that an
outflow of resources, that can be reliably estimated, will be required to settle such an obligation.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the balance sheet date,
taking into account the risks and uncertainties surrounding the obligation. When a provision is measured using the cash flows estimated to settle the
present obligation, its carrying amount is the present value of those cash flows (when the effect of the time value of money is material).

When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a receivable is recognised as
an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.

Contingent Liabilities and Contingent Assets are not recognised but are disclosed in the notes.

2.15 Earnings per share

Basic earnings per share is computed by dividing the profit after tax / (loss) attributable to equity shareholders by the weighted average number of
equity shares outstanding during the year.

The weighted average number of equity shares outstanding during the year is adjusted for events including bonus issue, bonus element in a rights issue
to existing shareholders, share split and reverse share split (consolidation of shares). Diluted earnings per share is computed by dividing the profit /
(loss) after tax attributable to equity shareholders as adjusted for dividend, interest and other charges to expense or income (net of any attributable
taxes) relating to the dilutive potential equity shares, by the weighted average number of equity shares considered for deriving basic earnings per share
and the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares.

2.16 Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset are capitalised during the period of time that is
necessary to complete and prepare the asset for its intended use or sale. Other borrowing costs are expensed in the period in which they are incurred
under finance costs. Borrowing cost also includes exchange differences to the extent regarded as an adjustment to interest costs.

2.17 Non-current assets held for sale / distribution to owners and discontinued operations

The company classifies non-current assets and disposal groups as held for sale/distribution to owners if their carrying amounts will be recovered
principally through a sale / distribution rather than through continuing use. Actions required to complete the sale/ distribution should indicate that it
is unlikely that significant changes to the sale/ distribution will be made or that the decision to sell/ distribute will be withdrawn. Management must
be committed to the sale/distribution and it is expected to be completed within one year from the date of classification.

The criteria for held for sale/ distribution classification is regarded as met only when the assets or disposal group is available for immediate sale/
distribution in its present condition, subject only to terms that are usual and customary for sales/ distribution of such assets (or disposal groups), its
sale/ distribution is highly probable; and it will genuinely be sold, not abandoned. The company treats sale/ distribution of the asset or disposal group
to be highly probable when:

- The appropriate level of management is committed to a plan to sell the asset (or disposal group); An active programme to locate a buyer and complete
the plan has been initiated;

-The asset (or disposal group) is being actively marketed for sale at a price that is reasonable in relation to its current fair value;

-The sale is expected to qualify for recognition as a completed sale within one year from the date of classification; and

-Actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn.

Non-current assets held for sale/for distribution to owners and disposal groups are measured at the lower of their carrying amount and the fair value
less costs to sell/ distribute. Assets and liabilities classified as held for sale/ distribution are presented separately in the balance sheet. Property, Plant
and Equipment and intangible assets once classified as held for sale/ distribution to owners are not depreciated or amortised.

A disposal group qualifies as discontinued operation if it is a component of an entity that either has been disposed of, or is classified as held for sale,
and:

-represents a separate major line of business or geographical area of operations,

-is part of a single co-ordinated plan to dispose of a separate major line of business or geographical area of operations
-is a subsidiary acquired exclusively for resale.

Discontinued operations are excluded from the results of continuing operations and are presented as a single amount as profit or loss after tax from
discontinued operations in the statement of profit and loss.

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

Financial assets and financial liabilities are initially measured at fair value or transaction value wherever appropriate. Transaction costs that are
directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair
value through Statement of Profit and Loss (''FVTPL'')) are added to or deducted from the fair value of the financial assets or financial liabilities, as
appropriate, on initial recognition.

Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit and loss are recognised
immediately in Statement of Profit and Loss.

Trade receivables are recognised when they are originated.

Trade payables are in respect of the amount due on account of goods purchased or services availed in the normal course of business. They are
recognised at the transaction price i.e., the amount payable for the goods or services, if the transaction does not contain a significant financing
component.

a) Financial Assets

(i) Recognition and initial measurement

All financial assets are recognised initially at fair value. Transaction costs that are directly attributable to the acquisition of financial assets (other
than financial assets at fair value through Statement of Profit or Loss (''FVTPL'']) are added to the fair value of the financial assets, on initial
recognition. Transaction costs directly attributable to the acquisition of financial assets at FVTPL are recognised immediately in Statement of Profit
and Loss.

(ii) Subsequent measurement

For the purposes of subsequent measurement, financial assets are classified in four categories:

- Debt instruments at amortised cost

- Debt instruments at fair value through other comprehensive income (FVTOCI);

- Debt instruments and equity instruments at fair value through profit or loss (FVTPL);

- Equity instruments measured at fair value through other comprehensive income (FVTOCI).

Debt instruments at amortised cost

A ''debt instrument'' is measured at the amortised cost if both the following conditions are met:

-The asset is held within a business model whose objective is to hold assets for collecting 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 (SPPI) on the
principal amount outstanding.

After initial measurement, such financial assets are subsequently measured at amortised cost using the effective interest rate (EIR) method.

Amortised 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 amortisation is included under the head finance income in the profit or loss. The losses arising from impairment are recognised in the profit or
loss. This category generally applies to trade and other receivables.

Debt instrument at FVTOCI

A ''debt instrument'' is classified as FVTOCI if both of the following criteria are met:

-the objective of the business model is achieved both by collecting contractual cash flows and selling the financial assets, and

- The asset''s contractual cash flows represent SPPI.

Debt instruments included within the FVTOCI category are measured initially as well as at each reporting date at fair value. Fair value movements are
recognised in the other comprehensive income (OCI).

Debt instrument at FVTPL

FVTPL is a residual category for debt instruments. Any debt instrument, which does not meet the criteria for categorisation as amortised cost or as
FVTOCI, is classified as FVTPL. Debt instruments included within the FVTPL category are measured at fair value with all changes recognised in the
statement of profit and loss.

In addition, the company may elect to designate a debt instrument, which otherwise meets amortised cost or FVTOCI criteria, as FVTPL. However,
such election is chosen only if doing so reduces or eliminates a measurement or recognition inconsistency (referred to as ''accounting mismatch'').

A financial asset is de-recognised only when;

a. The entity has transferred the rights to receive cash flows from the financial asset
or

b. The entity retains the contractual rights to receive the cash flows of the financial asset, but expects a contractual obligation to pay the cash flows to
one or more recipients.

Where entity has transferred an asset, the entity examines and assesses whether it has transferred substantially all risks and rewards of ownership of
financial asset. In such cases, financial asset is de-recognised. Where entity has not transferred substantially all risks and rewards of ownership of
financial asset, such financial asset is not de-recognised.

Where the entity has neither transferred a financial asset nor retains substantially all risks and rewards of ownership of the financial asset, the
financial asset is de-recognised, if the entity has not retained control of the financial asset. Where the entity retains control of the financial asset is
continued to be recognised to the extent of continuing involvement in the financial asset.

(iv) Investment in subsidiaries

The company''s investment in equity instruments of subsidiaries is accounted for at cost as per Ind AS 27, including adjustment for fair value of
obligations, if any, in relation to such subsidiaries.

b) Financial liabilities and equity instruments

(i) Initial recognition and measurement

All financial liabilities are recognised initially at fair value giving effect to transaction cost (if any) that is attributable to the acquisition of the financial
liabilities which is also adjusted.

(ii) Subsequent measurement

The measurement of financial liabilities depends on their classification, as described below:

Loans and borrowings

After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the Effective Interest Rate (EIR)
method. Gains and losses are recognised in profit or loss when the liabilities are de-recognised through the EIR amortisation process. Amortised 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 amortisation is
included under finance costs in the statement of profit and loss.

Trade and other payables

These amounts represent liabilities for goods or services provided to the company which are unpaid at the end of the reporting period. Trade and other
payables are presented as current liabilities when the payment is due within a period of 12 months from the end of the reporting period.

For all trade and other payables classified as current, the carrying amounts approximate fair value due to the short maturity of these instruments.
Other payables falling due after 12 months from the end of the reporting period are presented as non-current liabilities and are measured at amortised
cost unless designated at fair value through profit and loss at the inception.

The company enters into deferred payment arrangements (acceptances) whereby lenders such as banks and other financial institutions make
payments to supplier''s banks for purchase of raw materials. The banks and financial institutions are subsequently repaid by the company at a later
date. These are normally settled up to 90 days. These arrangements for raw materials are recognised as Acceptances i.e. trade payables and are
included in total outstanding dues of creditors other than micro enterprises and small enterprises.

Financial guarantee

Financial guarantee contracts issued by the company are those contracts that require a payment to be made to reimburse the holder for a loss it incurs
because, the principal debtor fails to make a payment when due in accordance with the terms of a debt instrument. Financial guarantee contracts are
recognised initially as a liability at fair value, including transaction costs that are directly attributable to the issuance of the guarantee. Subsequently,
the liability is measured at the higher of the amount of loss allowance determined as per impairment requirements of Ind- AS 109 and the amount
recognised less cumulative amortisation.

All interest-related charges and, if applicable, changes in an instrument''s fair value that are reported in statement of profit or loss are included within
finance costs or finance income.

Other financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial
recognition as at fair value through statement of profit or loss. Gains or losses on liabilities held for trading or designated as at FVTPL are recognised in
the profit or loss.

A financial liability is de-recognised when the obligation under the liability 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 de-recognition of the original liability and the recognition of a new liability. The difference in the respective
carrying amounts is recognised in the statement of profit or loss.

c) Offsetting

Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if there is a currently enforceable legal right to
offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.

d) Impairment of Financial assets

The Board assesses at balance sheet date whether a financial asset or a group of financial assets is impaired. Ind AS 109 requires expected credit losses
to be measured through a loss allowance. The company recognises lifetime expected losses for all contract assets and / or all trade receivables that do
not constitute a financing transaction. For all other financial assets, expected credit losses are measured at an amount equal to the expected credit
losses for the next 12 months or at an amount equal to the lifetime expected credit losses, if the credit risk on the financial asset has increased
significantly since initial recognition.

e) Fair value measurement

The Board 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:

-In the principal market for the asset or liability, or

- In the absence of a principal market, in the most advantageous market for the asset or liability which are accessible to 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 best economic 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.

Valuation techniques that are appropriate in the circumstances are used and for which sufficient data are available to measure fair value, maximising
the use of relevant observable inputs and minimising the use of unobservable inputs. All assets and liabilities for which fair value is measured or
disclosed in the financial statements are categorised 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:

-Level 1: Quoted (unadjusted) market prices in active markets for identical assets or liabilities;

-Level 2: Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable, or

- 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 recognised in the financial statements on a recurring basis, the company determines whether transfers have occurred
between levels in the hierarchy by re-assessing categorisation (based on the lowest level Input that is significant to the fair value measurement as a
whole) at the end of each reporting period.

f) Derivative financial instruments

Derivative financial instruments are accounted for at FVTPL except for derivatives designated as hedging instruments in cash flow hedge relationships,
which require a specific accounting treatment. To qualify for hedge accounting, the hedging relationship must meet several strict conditions with
respect to documentation, probability of occurrence of the hedged transaction and hedge effectiveness.

These arrangements have been entered into to mitigate currency exchange risk arising on account of repayment of foreign currency term loan and
interest thereon. For the reporting period under audit, the company has not designated any forward currency contracts as hedging instruments.

2.19 Cash and cash equivalents and cash flow statement

Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short-term balances (with maturity of three months or less from
the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of
changes in value.

Cash flows are reported using the Indirect method, whereby profit/ (loss) before extraordinary items and tax is appropriately classified for the effects
of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. In cash flow statement, cash and cash
equivalents include cash in hand, balances with banks in current accounts and other short- term highly liquid investments with original maturities of
three months or less.

2.20 Dividend on ordinary shares

The entity recognises a liability to make cash or non-cash distributions to equity holders of the company when the distribution is authorised and the
distribution is no longer at the discretion of the company. The amount so authorised is recognised directly in equity.

2.21 Segment reporting

An operating segment is defined as a component of the entity that represents business activities from which it earns revenue and incurs expenses and
for which discrete financial information is available. The operating segments are based on the entity''s internal reporting structure and the manner in
which operating results are reviewed by the Chief Operating Decision Maker (CODM).

2.22 Recent Pronouncements

The Ministry of Corporate Affairs (“MCA”] notifies new standards or amendment to the existing standards under Companies (Indian Accounting
Standards) Rules as issued from time to time.

For the year ended March 31, 2025, MCA has notified Ind AS - 117 Insurance contracts and amendments to Ind AS 116 - Leases, relating to sale and
leaseback transactions applicable from April 01,2024. The company has reviewed the new pronouncements and based on its evaluation opines that it
does not have any impact in its financial statements.

3. KEY SOURCES OF ESTIMATION UNCERTAINTY AND CRITICAL ACCOUNTING JUDGEMENTS

In the course of applying the policies outlined in all notes under section 2 above, the company is required to make judgements, estimates and
assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated
assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which
the estimate is revised if the revision affects only that period, or in the period of the revision and future period, if the revision affects current and future
period.

(i) Useful lives of Property, Plant and Equipment

The Board reviews the useful lives of Property, Plant and Equipment once a year. Such lives are dependent upon an assessment of both the technical
lives of the assets and also their likely economic lives based on various internal and external factors including relative efficiency and operating costs.
Accordingly depreciable lives are reviewed annually using the best information available to the Management.

(ii) Impairment of investments in subsidiaries

Determining whether the investments in subsidiaries are impaired, requires an estimate in the value in use of investments. In considering the value in
use, the Board has anticipated the future commodity prices, capacity utilisation of plants, operating margins, discount rates and other factors of the
underlying businesses / operations of the investee companies.

Any subsequent changes to the cash flows due to changes in the above mentioned factors could impact the carrying value of investments, necessitating
the recognition of a provision for diminution in value.

(iii) Provisions and liabilities

Provisions and liabilities are recognised in the period when it becomes probable that there will be a future outflow of funds resulting from past
operations or events that can reasonably be estimated. The timing of recognition requires application of judgement to existing facts and circumstances
which may be subject to change. The amounts are determined by discounting the expected future cash flows at a pre-tax rate that reflects current
market assessments of the time value of money and the risks specific to the liability.

(iv) Contingencies

In the normal course of business, contingent liabilities may arise from litigation and other claims against the company. Potential liabilities that are
possible but not probable of crystalising or are very difficult to quantify reliably are treated as contingent liabilities. Such liabilities are disclosed in the
notes but are not recognised.

(v) Fair value measurements

When the fair values of financial assets or financial liabilities recorded or disclosed in the financial statements cannot be measured based on quoted
prices in active markets, their fair value is measured using valuation techniques including the Discounted Cash Flow model. The inputs to these models
are taken from observable markets where possible, but where this is not feasible, a degree of judgment is required in establishing fair values.
Judgements include consideration of inputs such as liquidity risk, credit risk and volatility.

The credit period on goods sold ranges from 0 to 60 days without security. Trade receivable with credit impairment is identified on case to case
basis.

In determining the allowances for doubtful trade receivables, the Company has used a practical expediency 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.

Before accepting any new customer, the company evaluates the financial soundness, business opportunities, credit references etc of the new
customer and defines credit limit and credit period. The credit limit and the credit period are reviewed at periodical intervals.

The Company does not generally hold any collateral or other credit enhancements over these balances .

Trade receivables have been offered as collateral towards borrowings (refer note no 22, 27 and 44).

In determining the recoverability of a trade receivable, the Company considers any change in the credit quality of the trade receivable from the
date when credit was initially granted up to the end of the reporting period. The concentration of credit risk is limited due to the fact that the
customer base is large and unrelated.

e) In the period of five years immediately preceding 31-03-2025

i) The Company has not allotted any equity shares as fully paid-up without payment being received in cash.

ii) The Company has not allotted any equity shares by way of bonus issue.

iii) The Company has not bought back any equity shares.

f) Money Received against Share Warrants

Pursuant to the approval of the Board of Directors in their meeting held on 24th March, 2022 and approval of shareholders through special
resolution dated 20th April, 2022 passed in Extra-Ordinary General Meeting, the Board has allotted 14,00,000 Warrants on 7th May 2022,
each carrying a right to subscribe to one Equity Share per Warrant, at a price of Rs. 750/- per Warrant ("Warrant Price”), aggregating to
Rs.105 crores. The Warrants were issued to APL Apollo Mart Limited, Delhi ("Acquirer”), a wholly owned subsidiary of APL Apollo Tubes
Limited, Delhi an entity which does not qualify as a promoter or member of the promoter group of the Company. The Warrants were issued
to APL Apollo Mart Limited by way of a preferential allotment.

25% of the total consideration (25% of Rs. 105 Crores i.e., Rs. 26.25 crores) was received on 6th May, 2022 and balance 75% of the total
consideration (75% of Rs.105 Crores i.e., Rs.78.75 crores) was received on 2nd November, 2023.

General Reserve

General Reserve is an accumulation of retained earnings of the Company, apart from the balance in the statement of profit and loss
which can be utilised for meeting future obligations.

Capital Reserve

Reserve is primarily created on amalgamation as per statutory requirement.

Securities Premium

This consists of premium realised on issue of shares and will be applied/ utilised in accordance with the provisions of the Companies
Act, 2013.

Retained earnings

Surplus in Statement of Profit and Loss is part of retained earnings.This is available for distribution to shareholders as dividend and
capitalisation

b. As lessee:

Various Buildings have been taken on operating lease with lease term between 11 and 144 months for office premises, storage space and retail
shop, which are renewable on a periodic basis by mutual consent of both parties. There is no restriction imposed by lease arrangements, such
as those concerning dividends, additional debts.

Ind AS 116 requires lessees to determine the lease term as the non-cancellable period of a lease adjusted with any option to extend or
terminate the lease, if the use of such option is reasonably certain. The reporting entity makes an assessment on the expected lease term on a
lease-by-lease basis and thereby assesses whether it is reasonably certain that any options to extend or terminate the contract will be
exercised.

For the short-term ¥*d low value leases, the reporting entity recognizes the lease payments as an operating expense on a straight-line basis

42. Segment Reporting

The company is primarily engaged in the business of Trading and retailing of Steel Tubes & Pipes, Steel- Flat Products, roofing, TMT, Steel-long
Products, Sanitaryware, Tiles, PVC Pipes & Fittings and other building material products. In accordance with IND AS 108 "Operating Segments", the
company has presented the segment information on the basis of its consolidated financial statements. Hence, the segment information for the
separate (i.e. standalone) financial statements are not presented.

b) Defined benefit plan
(i) Gratuity

The Company has funded the gratuity liability ascertained on actuarial basis, wherein every employee who has completed five years or more of
service is entitled to gratuity on retirement or resignation or death calculated at 15 days salary for each completed year of service, subject to a
maximum of Rs. 20 lacs per employee. The vesting period for Gratuity as payable under The Payment of Gratuity Act,1972 is 5 years.

The plans in India typically expose the Company to actuarial risks such as: investment risk, interest rate risk, longevity risk and salary risk.

Investment risk: The present value of the defined benefit plan liability is calculated using a discount rate determined by reference to government
bond yields; if the return on plan asset is below this rate, it will create a plan deficit.

Interest risk: A decrease in the bond interest rate will increase the plan liability; however, this will be partially offset by an increase in the return on
the plan''s debt investments.

Longevity risk: The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan
participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan''s liability.

Salary risk: The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. As such, an
increase in the salary of the plan participants will increase the plan''s liability.

There are no other post-retirement benefits provided to employees.

The most recent actuarial valuation of the plan assets and the present value of the defined benefit obligation were carried out at 31-03-2025. The
present value of the defined benefit obligation, and the related current service cost and past service cost, were measured using the projected unit
credit method.

The Company expects to contribute Rs.0.65 crores (previous year Rs.0.36 crores) to its gratuity plan for the next year.

In assessing the Company''s post retirement liabilities, the Company monitors mortality assumptions and uses up-to date mortality tables, the base
being the Indian assured lives mortality (2012-14) ultimate.

Expected return on plan assets is based on expectation of the average long term rate of return expected on investments of the fund during the
estimated term of the obligations after considering several applicable factors such as the composition of plan assets, investment strategy, market
scenario, etc.

The estimates of future salary increase, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors,
such as supply and demand in the employment market.

The discount rate is based on the prevailing market yields of Government of India securities as at the balance sheet date for the estimated term of
the obligations.

Effective March 29, 2018, the Government of India has notified the Payment of Gratuity (Amendment) Act, 2018 to raise the statutory ceiling on
gratuity benefit payable to each employee to Rs 20 lakhs from Rs 10 lakhs. Accordingly the amended and improved benefits, if any, are recognised
as current year''s expense as required under paragraph 103 of Ind AS 19.

Sensitivity Analysis:

Significant actuarial assumptions for the determination of the defined benefit obligation are discount rate, expected salary increase and mortality.
The sensitivity analysis below have been determined based on reasonably possible changes of the respective assumptions occurring at the end of
the reporting period, while holding all other assumptions constant.

The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation as it is unlikely that the
change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.

The average expected remaining lifetime of the plan members is 6 years (31-03-2024 - 6 years) as at the valuation date which represents the
weighted average of the expected remaining lifetime of all plan participants.

The Company had deployed its investment assets in an insurance plan which is invested in market linked bonds. The investment returns of the
market-linked plan are sensitive to the changes in interest rates as compared with the investment returns from the smooth return investment
plan. The liabilities'' duration is not matched with the assets'' duration.

The liabilities of the fund are funded by assets. The company aims to maintain a close to full-funding position at each Balance Sheet date. Future
expected contributions are disclosed based on this principle.

The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the prior period.

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48. Financial Instruments
A. Capital Management
(1) Capital risk management

The Company''s capital requirements are mainly to fund its expansion, working capital and strategic acquisitions. The principal source of funding of
the Company has been, and is expected to continue to be, cash generated from its operations supplemented by borrowings from bank and funds from
capital markets. The Company is not subject to any externally imposed capital requirements.

The Company regularly considers other financing and refinancing opportunities to diversify its debt profile, reduce finance cost and closely monitors
its judicious allocation amongst competing expansion projects and strategic acquisitions, to capture market opportunities at minimum risk.

C. Financial risk management

The Company has an Audit & Risk Management Committee established by its Board of Directors for overseeing the Risk Management Framework
and developing and monitoring the Company''s risk management policies. The risk management policies are established to ensure timely
identification and evaluation of risks, setting acceptable risk thresholds, identifying and mapping controls against these risks, monitor the risks
and their limits, improve risk awareness and transparency. Risk management policies and systems are reviewed regularly to reflect changes in
the market conditions and the Company''s activities to provide reliable information to the Management and the Board to evaluate the adequacy of
the risk management framework in relation to the risk faced by the Company.

The risk management policies aims to mitigate the following risks arising from the financial instruments:

- Market risk

- Credit risk; and

- Liquidity risk

(1) 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 the market prices. The
Company is exposed in the ordinary course of its business to risks related to changes in commodity prices and interest rates.

Sensitivity

Currency risks related to the amounts of foreign currency loans are fully hedged using derivatives that mature on the same dates as the loans are
due for repayment.

(ii) Commodity price risk:

The Company''s revenue is exposed to the market risk of price fluctuations related to the sale of its steel and other building products. Market
forces generally determine prices for the steel products sold by the Company. These prices may be influenced by factors such as supply and
demand, production costs (including the costs of raw material inputs) and global and regional economic conditions and growth. Adverse changes
in any of these factors may reduce the revenue that the Company earns from the sale of its steel products.

The Company purchases the steel and other building products in the open market from third parties as well as from subsidiaries at prevailing
market price. The Company is therefore subject to fluctuations in the prices of steel coil, steel pipes,sanitary wares etc.

The Company aims to sell the products at prevailing market prices. Similarly the Company procures the products based on prevailing market
rates as the selling prices of steel products and the prices of inputs move in the same direction.

(iii) 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 is exposed to interest rate risk since funds are borrowed at both fixed and floating interest rates. Interest rate risk is
measured by using the cash flow sensitivity for changes in variable interest rate. The borrowings of the Company are principally denominated in
rupees. The risk is managed by the Company by maintaining an appropriate mix between fixed and floating rate borrowings.

The following table provides a break-up of the Company''s fixed and floating rate borrowings:

(2) Credit risk management:

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company.

Credit risk encompasses of both, the direct risk of default and the risk of deterioration of credit worthiness as well as concentration risks.

Company''s credit risk arises principally from the trade receivables, advances and financial guarantees furnished to the lenders of the subsidiaries.

(i) Trade receivables:

Customer credit risk is managed centrally by the company and subject to established policy, procedures and control relating to customer credit risk
management. Credit quality of a customer is assessed based on financial position, past performance, business/economic conditions, market
reputation, expected business etc. Based on that credit limit & credit terms are decided. Outstanding customer receivables are regularly monitored.

Trade receivables consist of a large number of customers spread across diverse industries and geographical areas with no significant concentration
of credit risk. The outstanding trade receivables are regularly monitored and appropriate action is taken for collection of overdue receivables.

The company does not anticipate any downfall in the current level of performance of the subsidiaries in the near future. The networth of the subsidiaries are
sufficient enough to manage in the event of default.

(3) Liquidity risk management

Liquidity risk refers to the risk of financial distress or extraordinary high financing costs arising due to shortage of liquid funds in a situation where
business conditions unexpectedly deteriorate and requiring financing. The Company requires funds both for short term operational needs as well as
for strategic acquisitions. The Company generates sufficient cash flow for operations, which together with the available cash and cash equivalents and
borrowings provide liquidity. The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing
facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.

The following tables detail the Company''s remaining contractual maturity for its non-derivative financial liabilities with agreed repayment
periods and its non-derivative financial assets. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based
on the earliest date on which the Company can be required to pay. The tables include both interest and principal cash flows.

With respect to floating rate, the undiscounted amount is derived from interest rate curves at the end of the reporting period. The contractual
maturity is based on the earliest date on which the Company may be required to pay.

52. No proceedings have been initiated or pending against the Company for holding Benami property under the Benami Transactions
(Prohibition) Act, 1988 (45 of 1988) and the Rules made there under

53. The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities
(Intermediaries) with the understanding that the Intermediary shall:

(a) 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

(b) provide any guarantee, security or the like to or on behalf of the ultimate beneficiary

54. 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:

(a) 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

(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries

57. During the year the Company has not disclosed or surrendered, any income other than the income recognised in the books of accounts in the
tax assessments under Income Tax Act, 1961.

58. The Company 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.

59. The Board of Directors of the Company at their meeting held on 18th December, 2023 approved a Scheme of Arrangement under section 230¬
232 and read with other applicable provisions of the Companies Act, 2013 for demerger of the Demerged Undertaking (“Trading Business”) of
Shankara Building Products Limited (“Demerged Company”) into Shankara Buildpro Limited (“Resulting Company”) which is a wholly owned
subsidiary of the Demerged Company and their respective shareholders and creditors (“Scheme”).

The Scheme inter-alia provides for

(i) Demerger, transfer and vesting of Trading Business from the Demerged Company into the Resulting company on a going concern basis.

(ii) Reduction and cancellation of equity share capital of the Resulting company held by the Demerged Company.

(iii) Issuance and allotment of Equity Shares by the Resulting Company to all the shareholders of the Demerged Company as per the Share
Entitlement Ratio i.e., for every 1 (one) fully paid equity share of face value of INR 10/- (Indian Rupees Ten only) each, held in the Demerged
Company as on the Record Date (as defined in the Scheme), the equity shareholders of the Demerged Company shall be issued 1 (One) fully paid
equity share of face value of INR 10/- (Indian Rupees Ten Only) each in the Resulting Company, in consideration of transfer of Demerged
Undertaking. After the sanction of the Scheme by the National Company Law Tribunal, Bengaluru having jurisdiction over the Companies (NCLT)
and upon the fulfilment of conditions as prescribed in clause 18 of the Scheme, the Scheme shall become effective from the Effective Date as
defined in the Scheme.

The Appointed date is 01.04.2024 as per the Scheme which is approved by the Board of Directors in the Board Meeting held on 18th December
2023.

The Scheme of arrangement has been approved by BSE Limited ,National Stock Exchange of India Limited vide their observation letter dated 1st
July 2024 and 6th July 2024 respectively.

The Company filed an online application with the National Company Law Tribunal (NCLT) on August 17, 2024. Additionally, physical documents,
including the Company application (NCLT-1), were submitted to the NCLT Bangalore bench on August 19, 2024.

Pursuant to the application filed with the Hon''ble National Company Law Tribunal, Bengaluru (NCLT) on August 17, 2024 ,the NCLT has passed
an order dated 18th December, 2024 (the “Order”), directing inter alia, that a meeting be convened and held of the equity shareholders of
Shankara Building Products Limited, Bengaluru (herein after mentioned as the “Company” or “Applicant Company No.1/Demerged Company”),
for the purpose of considering the scheme of arrangement proposed to be made amongst Shankara Building Products Limited,Bengaluru
(Applicant Company No.1/Demerged Company) and Shankara Buildpro Limited,Bengaluru (Applicant Company No.2/Resulting Company) and
their respective shareholders & creditors.

In pursuance of the directions of the Hon''ble Tribunal, the meeting of the Equity Shareholders of the Demerged Company was duly convened on
February 12, 2025 at 11:00 A.M. at the registered office of the Demerged Company, and the approval of the shareholders was obtained for the
proposed Scheme of Arrangement. Thereafter, in accordance with the said order, the second motion petition was filed before the Hon''ble
Tribunal. The petition has been admitted and listed for hearing on 26th May 2025.

The Scheme is yet to be approved by the National Company Law Tribunal, Bengaluru (NCLT) and accordingly it has no impact on the financial
statements.

The Board is of the view that provisions of Ind AS 105- “Non-Current Assets Held for Sale and Discontinued Operations” are not applicable as
there is no sale by the Demerged Company. Further there is no inflow of cash as consideration for sale into the Demerged Company.

60. The company has not granted loans or advances in the nature of loans to any Promoters, Directors, KMPs which are repayable on demand or
without specifying any terms or period of repayments but has granted advances in the nature of loans to its related parties i.e. four wholly owned
subsidiaries which are repayable on demand. Refer Note No. 9(a)

61. Events occurring after the Balance Sheet date

The Board has recommended a final dividend of Rs.3/-(Rupees Three only) per equity share (face value of Rs. 10/- each) for the financial year
ended 31-03-2025 aggregating to Rs.7.27 crores subject to the approval of shareholders in the ensuing Annual General Meeting.

62. The financial statements has been approved by the Board of directors at their meeting held on 16th May, 2025.

As per our report attached of even date For and on behalf of the Board of Directors

For SUNDARAM & SRINIVASAN

Sukumar Srinivas C.Ravikumar

Chartered Accountants _{w TN}. _TNTmT , ,

_{ICAI Firm Reg No}. _004207S ^Managmg ^{Director DI}N: Whole-time Director DIN:

01668064 01247347

Srinivasan K

Partner Alex Varghese Ereena Vikram

^Me^mbe^rsh^{ip No:} 209120 Chief Financial Officer Company Secretary

ACS Membership No: 33459

Place: Bengaluru Place: Bengaluru

Date: May 16, 2025 Date: May 16, 2025

---

Mar 31, 2024

Estimation of fair value

The best evidence of fair values is current prices in an active market for similar properties. Since investment properties are leased out by the Company, the market rate for sale/purchase of such premises are representative of fair values. Company''s investment properties are at a location where active market is available for similar kind of properties. Hence fair value is ascertained on the basis of market rates prevailing for similar properties in those location as determined by an Independent registered valuer as defined under Rule 2 of Companies (Registered Valuers and Valuation) Rules, 2017 and consequently classified as a level 2 valuation.

Capital advances includes borrowing costs of ''Nil (Previous year ''0.05 crores at 8%) which represents average borrowing costs of the company.This also includes advances made for purchase of land and Building in Chennai, Udupi, Mumbai and Bengaluru in the years 2013, 2018, 2021 & 2023 respectively.

* Includes goods-in-transit amounting to ''2.08 crores (PY ''4.25 crores) and is net of provision for damaged goods amounting to ''0.50 crores. (PY ''Nil)

(refer note no. 47 B for related party transactions in relation to goods-in-transit)

Inventories have been hypothecated as security against certain bank borrowings of the company (refer note no 22, 27 and 44)

Notes to the Standalone Financial Statements

The credit period on goods sold ranges from 0 to 60 days without security. Trade receivable with credit impairment is identified on case to case basis.

In determining the allowances for doubtful trade receivables, the Company has used a practical expendiency 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.

Before accepting any new customer, the company evaluates the financial soundness, business opportunities, credit references etc of the new customer and defines credit limit and credit period. The credit limit and the credit period are reviewed at periodical intervals.

The Company does not generally hold any collateral or other credit enhancements over these balances .

Trade receivables have been offered as collateral towards borrowings (refer note no 22, 27 and 44).

In determining the recoverability of a trade receivable, the Company considers any change in the credit quality of the trade receivable from the date when credit was initially granted up to the end of the reporting period. The concentration of credit risk is limited due to the fact that the customer base is large and unrelated.

The company has entered into cash management service agreement with certain banks for the collection of cheques at various branches and transfer of the funds to certain cash credit accounts by way of standing instructions. Pending such credits in the account, the cash credit accounts are disclosed as net of such collections. The above mentioned cash and cash equivalents contain the amount that are available for use by the company.

The Authorized share capital of the Company has been increased to ?30 crores divided into 3,00,00,000 (Three Crore Only) Equity Shares of ''10/- (Rupees Ten) each pursuant to approval of the shareholders in their Extra-ordinary meeting held on April 20, 2022.

b) Rights, preferences and restrictions

(i) Rights, preferences and restrictions attached to shares and terms of conversion of other securities into equity. The company has one class of equity shares having par value of ''10 each. Each share holder is eligible for one vote per share held and carry a right to dividend. In the event of liquidation, the equity share holders are eligible to receive the remaining assets of the company after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

(ii) There are no restrictions attached to equity shares except for the below:

Pursuant to the allotment of equity shares on conversion of 14,00,000 share warrants, the allotted equity shares are subject to a lock-in period for transferability of shares from the effective date of trading approval i.e. 14-03-2024 upto 29-09-2024 as specified in the requirements to Regulation 167(2) of Chapter V of Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018.

e) In the period of five years immediately preceding 31-03-2024

i) The Company has not allotted any equity shares as fully paid-up without payment being received in cash.

ii) The Company has not allotted any equity shares by way of bonus issue.

iii) The Company has not bought back any equity shares.

f) Money Received against Share Warrants

Pursuant to the approval of the Board of Directors in their meeting held on 24th March, 2022 and approval of shareholders through special resolution dated 20th April, 2022 passed in Extra-Ordinary General Meeting, the Board has allotted 14,00,000 Warrants on 7th May 2022, each carrying a right to subscribe to one Equity Share per Warrant, at a price of ^750/- per Warrant ("Warrant Price”), aggregating to ^105 crores. The Warrants were issued to APL Apollo Mart Limited, Delhi ("Acquirer”), a wholly owned subsidiary of APL Apollo Tubes Limited, Delhi an entity which does not qualify as a promoter or member of the promoter group of the Company. The Warrants were issued to APL Apollo Mart Limited by way of a preferential allotment.

25% of the total consideration (25% of ^105 Crores i.e., ^26.25 crores) was received on 6th May, 2022 and balance 75% of the total consideration (75% of ^105 Crores i.e., ^78.75 crores) was received on 2nd November, 2023.

The Company allotted 14,00,000 Lakh shares on 9th November 2023.

Consequently , as on 31st March 2024, the share capital of the Company is indicated in Note no 20(a).

General Reserve

General Reserve is an accumulation of retained earnings of the Company, apart from the balance in the statement of profit and loss which can be utilised for meeting future obligations.

Capital Reserve

Reserve is primarily created on amalgamation as per statutory requirement.

Securities Premium

This consists of premium realised on issue of shares and will be applied/ utilised in accordance with the provisions of the Companies Act, 2013.

Retained earnings

Surplus in Statement of Profit and Loss is part of retained earnings.This is available for distribution to shareholders as dividend and capitalisation.

26.INCOME TAXES

Indian companies are subject to Indian income tax on a standalone basis. Each entity is assessed to tax on taxable profits determined for each fiscal year beginning on April 1 and ending on March 31.

Incomes are assessed based on book profits prepared under generally accepted accounting principles in India adjusted in accordance with the provisions of the Income tax Act, 1961. Such adjustments generally relate to depreciation of fixed assets, disallowances of certain provisions and accruals, the set-off of tax losses and depreciation carried forward and retirement benefit costs.

The Company has opted to exercise the option permitted under section 115BAA of the Income-tax Act, 1961. Accordingly, the Company has made a provision for Income tax and re-measured its deferred tax at the rate prescribed by the section.Income tax is charged at 22% plus surcharge of 10% plus health and education cess of 4%.

The majority of the deferred tax balance represents differential rates of depreciation for Property, Plant and Equipment under Income Tax Act, 1961 and disallowance of certain expenditure under Income Tax Act, 1961. Significant components of deferred tax assets/(liabilities) recognized in the financial statements are as follows:

Deferred tax asset have not been recognised in respect of the following items, because it is not probable that future long term capital gain will be available against which the Company can set off the long term/ short term capital loss.

Terms and Security:

1) Working capital loans are repayable on demand and carries interest @ 8.3% to 12.75% p.a. and secured by:

a) First charge on the existing and future current assets belonging to the company.

b) Guarantee by the Managing Director.

2) Other Loans- Purchase bills discounting and financing includes loan of f9.81 crores (PY f Nil) guaranteed by the Managing director.

Other disclosures (for both current and non-current borrowings)

(i) Quarterly returns or statements of current assets filed by the company with banks are in agreement with books of accounts.

(ii) The company has adhered to debt repayment and interest service obligations on time. The company has not been declared as wilful defaulter by any bank or financial institution.

(iii) All applicable cases where registration of charges or satisfaction is required to be filed with Registrar of Companies have been filed. No registration or satisfaction is pending as at the 31.03.2024

(iv) Term loans were applied for the purposes for which they were obtained. Further short term loans availed have not been utilised for long term purposes.

14,00,000 share warrants allotted during the financial year 2022-23 does not have dilutive effect on Earning Per Share (EPS) and hence have not been considered for the purpose of computing diluted EPS for the financial year 2022-23.The company does not have any potential equity shares. Accordingly, basic and diluted earnings per share would remain the same.

39. CONTINGENT LIABILITIES:
Particulars	As at 31-03-2024	As at 31-03-2023
(a) Claims against the company not acknowledged as debt
(i) Value added tax*	-	0.76
(ii) Goods and Service tax*	1.68	-
(iii) Income tax*	0.15	-
Total	1.83	0.76

*These cases are pending in appeal at various forums in the respective department. Outflows, if any, arising out of these claims would depend upon the adjudication of appellate authorities and the Company''s rights for further appeals.

Refer Note below for amount remitted against disputed liability
Particulars	As at 31-03-2024	As at 31-03-2023
(i) Value added tax	-	0.15
(ii) Goods and Service tax	0.09	-
40. COMMITMENTS
Particulars	As at 31-03-2024	As at 31-03-2023
Estimated value of capital commitments towards buildings (Net of advances made PY ?0.78 crores)	-	0 .19

b) As lessee:

Various Buildings have been taken on operating lease with lease term between 11 and 144 months for office premises, storage space and retail shop, which are renewable on a periodic basis by mutual consent of both parties. There is no restriction imposed by lease arrangements, such as those concerning dividends, additional debts.

Ind AS 116 requires lessees to determine the lease term as the non-cancellable period of a lease adjusted with any option to extend or terminate the lease, if the use of such option is reasonably certain. The reporting entity makes an assessment on the expected lease term on a lease-by-lease basis and thereby assesses whether it is reasonably certain that any options to extend or terminate the contract will be exercised.

For the short-term and low value leases, the reporting entity recognizes the lease payments as an operating expense on a straight-line basis over the term of the lease.

42. SEGMENT REPORTING

The company is primarily engaged in the business of Trading and reta iling of Steel Tubes & Pipes, Steel-Flat Products, roofing, TMT, Steel-long Products, Sanitaryware, Tiles, PVC Pipes & Fittings and other building material products. In accordance with IND AS 108 "Operating Segments", the company has presented the segment information on the basis of its consolidated financial statements. Hence, the segment information for the separate (i.e. standalone) financial statements are not presented.

b) Defined benefit plan

(i) Gratuity

The Company has funded the gratuity liability ascertained on actuarial basis, wherein every employee who has completed five years or more of service is entitled to gratuity on retirement or resignation or death calculated at 15 days salary for each completed year of service, subject to a maximum of ^20 lacs per employee. The vesting period for Gratuity as payable under The Payment of Gratuity Act,1972 is 5 years.

The plans in India typically expose the Company to actuarial risks such as: investment risk, interest rate risk, longevity risk and salary risk.

Investment risk: The present value of the defined benefit plan liability is calculated using a discount rate determined by reference to government bond yields; if the return on plan asset is below this rate, it will create a plan deficit.

Interest risk: A decrease in the bond interest rate will increase the plan liability; however, this will be partially offset by an increase in the return on the plan’s debt investments.

Longevity risk: The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan’s liability.

Salary risk: The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the plan’s liability.

There are no other post-retirement benefits provided to employees.

The most recent actuarial valuation of the plan assets and the present value of the defined benefit obligation were carried out at 31-03-2024. The present value of the defined benefit obligation, and the related current service cost and past service cost, were measured using the projected unit credit method.

The Company expects to contribute ^0.36 crores (previous year ^0.56 crores) to its gratuity plan for the next year.

In assessing the Company’s post retirement liabilities, the Company monitors mortality assumptions and uses up-to date mortality tables, the base being the Indian assured lives mortality (2012-14) ultimate.

Expected return on plan assets is based on expectation of the average long term rate of return expected on investments of the fund during the estimated term of the obligations after considering several applicable factors such as the composition of plan assets, investment strategy, market scenario, etc.

The estimates of future salary increase, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

The discount rate is based on the prevailing market yields of Government of India securities as at the balance sheet date for the estimated term of the obligations.

Effective March 29, 2018, the Government of India has notified the Payment of Gratuity (Amendment) Act,

2018 to raise the statutory ceiling on gratuity benefit payable to each employee to ^20 lakhs from ^10 lakhs Accordingly the amended and improved benefits, if any, are recognised as current year''s expense as required under paragraph 103, Ind AS 19.

Sensitivity Analysis:

Significant actuarial assumptions for the determination of the defined benefit obligation are discount rate, expected salary increase and mortality. The sensitivity analysis below have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant.

The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.

The average expected remaining lifetime of the plan members is 6 years (31-03-2023 - 6 years) as at the valuation date which represents the weighted average of the expected remaining lifetime of all plan participants.

The Company had deployed its investment assets in an insurance plan which is invested in market linked bonds. The investment returns of the market-linked plan are sensitive to the changes in interest rates as compared with the investment returns from the smooth return investment plan. The liabilities'' duration is not matched with the assets'' duration.

The liabilities of the fund are funded by assets. The company aims to maintain a close to full-funding position at each Balance Sheet date. Future expected contributions are disclosed based on this principle.

The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the prior period.

Notes

1. The purchases from related parties are in the ordinary course of business. Purchase transactions are based on normal commercial terms and conditions and market rates.

2. The sales to related parties are in the ordinary course of business. Sales transactions are based on prevailing price lists. The Company has not recorded any expected credit loss for trade receivables from related parties.

3. As the future liability for gratuity is provided on an actuarial basis for the company as a whole, the amount pertaining to individual is not ascertainable and therefore not included above

4. Advances was granted to Subsidiaries for working capital purpose.

Terms and Conditions

All outstanding balances are unsecured and are repayable in cash Guarantees furnished to subsidiaries:

Guarantees furnished to the lenders of the subsidiaries are for availing working capital facilities from the lender banks.

Guarantees furnished by subsidiaries:

Guarantees furnished to the lenders of the company are for availing working capital facilities from the lender banks.

Guarantees furnished by managing director:

Personal guarantee furnished by the managing director to the company are for availing working capital facilities from the lender banks.

48. Financial Instruments

A. Capital Management (1) Capital risk management

The Company''s capital requirements are mainly to fund its expansion, working capital and strategic acquisitions. The principal source of funding of the Company has been, and is expected to continue to be, cash generated from its operations supplemented by borrowings from bank and funds from capital markets. The Company is not subject to any externally imposed capital requirements. The Company regularly considers other financing and refinancing opportunities to diversify its debt profile, reduce finance cost and closely monitors its judicious allocation amongst competing expansion projects and strategic acquisitions, to capture market opportunities at minimum risk.

The Company monitors its capital using gearing ratio, which is net debt divided to total equity. Net debt includes, interest bearing loans and borrowings less cash and cash equivalents, Bank balances other than cash and cash equivalents.

C. Financial risk management

The Company has an Audit & Risk Management Committee established by its Board of Directors for overseeing the Risk Management Framework and developing and monitoring the Company''s risk management policies. The risk management policies are established to ensure timely identification and evaluation of risks, setting acceptable risk thresholds, identifying and mapping controls against these risks, monitor the risks and their limits, improve risk awareness and transparency. Risk management policies and systems are reviewed regularly to reflect changes in the market conditions and the Company''s activities to provide reliable information to the Management and the Board to evaluate the adequacy of the risk management framework in relation to the risk faced by the Company.

The risk management policies aims to mitigate the following risks arising from the financial instruments:

- Market risk

- Credit risk; and

- Liquidity risk"

(1) 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 the market prices. The Company is exposed in the ordinary course of its business to risks related to changes in commodity prices and interest rates.

Sensitivity

Currency risks related to the amounts of foreign currency loans are fully hedged using derivatives that mature on the same dates as the loans are due for repayment.

(ii) Commodity price risk:

The Company''s revenue is exposed to the market risk of price fluctuations related to the sale of its steel and other building products. Market forces generally determine prices for the steel products sold by the Company. These prices may be influenced by factors such as supply and demand, production costs (including the costs of raw material inputs) and global and regional economic conditions and growth. Adverse changes in any of these factors may reduce the revenue that the Company earns from the sale of its steel products.

The Company purchases the steel and other building products in the open market from third parties as well as from subsidiaries at prevailing market price. The Company is therefore subject to fluctuations in the prices of steel coil, steel pipes,sanitary wares etc.

The Company aims to sell the products at prevailing market prices. Similarly the Company procures the products based on prevailing market rates as the selling prices of steel products and the prices of inputs move in the same direction.

(iii) 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 is exposed to interest rate risk since funds are borrowed at both fixed and floating interest rates. Interest rate risk is measured by using the cash flow sensitivity for changes in variable interest rate. The borrowings of the Company are principally denominated in rupees. The risk is managed by the Company by maintaining an appropriate mix between fixed and floating rate borrowings.

(2) Credit risk management:

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. Credit risk encompasses of both, the direct risk of default and the risk of deterioration of credit worthiness as well as concentration risks.

Company''s credit risk arises principally from the trade receivables, advances and financial guarantees furnished to the lenders of the subsidiaries.

(i) Trade receivables:

Customer credit risk is managed centrally by the company and subject to established policy, procedures and control relating to customer credit risk management. Credit quality of a customer is assessed based on financial position, past performance, business/ economic conditions, market reputation, expected business etc. Based on that credit limit & credit terms are decided. Outstanding customer receivables are regularly monitored

Trade receivables consist of a large number of customers spread across diverse industries and geographical areas with no significant concentration of credit risk. The outstanding trade receivables are regularly monitored and appropriate action is taken for collection of overdue receivables.

(ii) Financial guarantees furnished :

The company has furnished Corporate guarantee to the lenders of the subsidiaries for availing working capital facilities.

The company does not anticipate any downfall in the current level of performance of the subsidiaries in the near future. The networth of the subsidiaries are sufficient enough to manage in the event of default.

Liquidity risk management

Liquidity risk refers to the risk of financial distress or extraordinary high financing costs arising due to shortage of liquid funds in a situation where business conditions unexpectedly deteriorate and requiring financing. The Company requires funds both for short term operational needs as well as for strategic acquisitions. The Company generates sufficient cash flow for operations, which together with the available cash and cash equivalents and borrowings provide liquidity. The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.

The company has access to the following undrawn borrowing facilities at the end of the reporting period:

The following tables detail the Company''s remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods and its non-derivative financial assets. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company can be required to pay. The tables include both interest and principal cash flows.

With respect to floating rate, the undiscounted amount is derived from interest rate curves at the end of the reporting period. The contractual maturity is based on the earliest date on which the Company may be required to pay.

The amount of guarantees furnished on behalf of subsidiaries included in note no.47(c) represents the maximum amount the Company could be forced to settle for the full guaranteed amount. Based on the expectation at the end of the reporting period, the Company considers that it is more likely than not that such an amount will not be payable under the arrangement.

Collateral

The Company has hypothecated part of its financial assets in order to fulfill certain collateral requirements for the banking facilities extended to the Company. There is an obligation to return the securities to the Company once these banking facilities are surrendered. (refer note no 22, 27 and 44)

The carrying amounts of short-term borrowings, trade receivables, trade payables, cash and cash equivalents, other bank balances and other B nancial assets and liabilities other than those disclosed in the above table, are considered to be the same as their fair values, due to their short term nature.

49. CORPORATE SOCIAL RESPONSIBILITY

The provisions of Corporate Social Responsibility (Section 135 of the Companies Act, 2013) are applicable to the company.

a) Gross amount required to be spent by Company during the year - ''0.82 Crores (Previous year: ''0.61 Crores)

b) Amount spent during the year:

Amount paid is included under Other expenses (refer note no 37)

Nature of CSR Activities - Healthcare infrastructure, education, environment sustainability, rehabilitating abandoned women and children.

50. Previous year figures

The previous year figures has been regrouped /rearranged wherever necessary to conform to the current year''s presentation.

52. No proceedings have been initiated or pending against the Company for holding Benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and the Rules made there under

53. The Company has not advanced or loaned or invested funds to any other person(s) or entity (ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner what so ever by or on behalf of the company (ultimate beneficiaries) or

(b) provide any guarantee, security or the like to or on behalf of the ultimate beneficiary

54. 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:

(a) 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

(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries

55. The Company has not operated in any crypto currency or Virtual Currency transactions

56. Balances outstanding with nature of transactions with struck off comapanies as per section 248 of the companies act , 2013 :

57. During the year the Company has not disclosed or surrendered, any income other than the income recoginsed in the books of accounts in the tax assessments under Income Tax Act, 1961.

58. The Company 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.

59. The Board of Directors of the Company at their meeting held on 18th December, 2023 approved a Scheme of Arrangement under section 230-232 and read with other applicable provisions of the Companies Act, 2013 for demerger of the Demerged Undertaking (“Trading Business”) of Shankara Building Products Limited (“Demerged Company”) into Shankara Buildpro Limited (“Resulting Company”) which is a wholly owned subsidiary of the Demerged Company and their respective shareholders and creditors (“Scheme”).

The Scheme inter-alia provides for

(i) Demerger, transfer and vesting of Trading Business from the Demerged Company into the Resulting company on a going concern basis.

(ii) Reduction and cancellation of equity share capital of the Resulting company held by the Demerged Company.

(iii) Issuance and allotment of Equity Shares by the Resulting Company to all the shareholders of the Demerged Company as per the Share Entitlement Ratio i.e., for every 1 (one) fully paid equity share of face value of INR 10/- (Indian Rupees Ten only) each, held in the Demerged Company as on the Record Date (as defined in the Scheme), the equity shareholders of the Demerged Company shall be issued 1 (One) fully paid equity share of face value of INR 10/- (Indian Rupees Ten Only) each in the Resulting Company, in consideration of transfer of Demerged Undertaking.

After the sanction of the Scheme by the National Company Law Tribunal, Bengaluru having jurisdiction over the Companies (NCLT) and upon the fulfilment of conditions as prescribed in clause 18 of the Scheme, the Scheme shall become effective from the Effective Date as defined in the Scheme.

The Appointed date is 01.04.2024 as per the Scheme which is approved by the Board of Directors in the Board Meeting held on 18th December 2023.

The Scheme is subject to receipt of necessary regulatory and other approvals inter-alia approval from BSE Limited, NSE Limited, Securities and Exchange Board of India, Shareholders and Creditors of the Company, NCLT and such other statutory and regulatory approvals as may be applicable.

The Board is of the view that provisions of Ind AS 105- “Non-Current Assets Held for Sale and Discontinued Operations” are not applicable as there is no sale by the Demerged Company. Further there is no inflow of cash as consideration for sale into the Demerged Company.

60. The company has not granted loans or advances in the nature of loans to any Promoters, Directors, KMPs which are repayable on demand or without specifying any terms or period of repayments but has granted advances in the nature of loans to its related parties i.e. two wholly owned subsidiaries which are repayable on demand. Refer Note No. 9 (a).

61. Events occurring after the Balance Sheet date

The Board has recommended a final dividend of ^/-(Rupees Three only) per equity share (face value of ^10/- each) for the financial year ended 31-03-2024 aggregating to ^7.27 crores subject to the approval of shareholders in the ensuing Annual General Meeting.

62. The financial statements has been approved by the Board of directors at their meeting held on 20th May, 2024.

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Mar 31, 2023

a) Certain immovable properties (viz land and buildings) have been hypothecated as security against the loans availed by the subsidiary companies (refer note no 44)

b) Certain vehicles have been hypothecated as security against the long term borrowings availed by the company (refer note no 22 and 44)

c) During the current year as well previous year the company has not revalued its Property, Plant and Equipment.

d) The title deeds of the Immovable properties (other than properties where the company is the lessee and the lease agreements are duly executed in favour of the lessee) are held in the name of the company.

Estimation of fair value

The best evidence of fair values is current prices in an active market for similar properties. Since investment properties are leased out by the Company, the market rate for sale/purchase of such premises are representative of fair values. Company''s investment properties are at a location where active market is available for similar kind of properties. Hence fair value is ascertained on the basis of market rates prevailing for similar properties in those location as determined by an Independent registered valuer as defined under Rule 2 of Companies (registered valuers and valuation) Rules, 2017 and consequently classified as a level 2 valuation.

The credit period on goods sold ranges from 0 to 60 days without security. Trade receivable with credit impairment is identified on case to case basis.

In determining the allowances for doubtful 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.

Before accepting any new customer, the company evaluates the financial soundness, business opportunities, credit references etc of the new customer and defines credit limit and credit period. The credit limit and the credit period are reviewed at periodical intervals.

The Company does not generally hold any collateral or other credit enhancements over these balances nor does it have a legal right of offset against any amounts owed by the Company to the counterparty.

Trade receivables have been offered as collateral towards borrowings (refer note no 22, 27 and 44).

In determining the recoverability of a trade receivable, the Company considers any change in the credit quality of the trade receivable from the date when credit was initially granted up to the end of the reporting period. The concentration of credit risk is limited due to the fact that the customer base is large and unrelated.

The company has entered into cash management service agreement with certain banks for the collection of cheques at various branches and transfer of the funds to certain cash credit accounts by way of standing instructions. Pending such credits in the account, the cash credit accounts are disclosed as net of such collections. The above mentioned cash and cash equivalents contain the amount that are available for use by the company.

b) Rights, preferences and restrictions

(i) Rights, preferences and restrictions attached to shares and terms of conversion of other securities into equity.

The company has one class of equity shares having par value of ''10 each. Each share holder is eligible for one vote per share held and carry a right to dividend. In the event of liquidation, the equity share holders are eligible to receive the remaining assets of the company after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

(ii) There are no restrictions attached to equity shares

General Reserve

General Reserve is an accumulation of retained earnings of the Company, apart from the balance in the statement of profit and loss which can be utilised for meeting future obligations.

Capital Reserve

Reserve is primarily created on amalgamation as per statutory requirement.

Securities Premium

This consists of premium realised on issue of shares and will be applied/ utilised in accordance with the provisions of the Companies Act, 2013.

Retained earnings

Surplus in Statement of Profit and Loss is part of retained earnings. This is available for distribution to shareholders as dividend and capitalisation.

Money Received against Share Warrants

Money received against share warrants represent amount received towards warrants which entitles the warrant holders the option to apply for and be allotted equivalent number of equity shares of the face value of ''10 /- each

During the year, the Company has received approval from its members for issue and allotment of 14,00,000 warrants convertible into equivalent number of equity shares (“Warrants”) on preferential basis, at the issue price of ''750 each (including premium of ''740 /- each share), under Regulation 28 (1) of the SEBI (LODR) Regulations, 2015 to APL Apollo Mart Limited, Delhi (“Acquirer”), a wholly owned subsidiary of APL Apollo Tubes Limited, Delhi amounting to ^105 crores.

An amount equivalent to 25% of issue price against warrants of ''26.25 crores has been received. The holder of the warrants would need to exercise the option to subscribe to equity shares before the expiry of 18 months from the date of allotment made on 7th May, 2022 upon payment of the balance 75% of the consideration for warrants.

The balance 75% on the said warrants shall be paid if and when the right attached to the warrants is exercised by APL Apollo Mart Limited, Delhi.

26.INCOME TAXES

Indian companies are subject to Indian income tax on a standalone basis. Each entity is assessed to tax on taxable profits determined for each fiscal year beginning on April 1 and ending on March 31.

Incomes are assessed based on book profits prepared under generally accepted accounting principles in India adjusted in accordance with the provisions of the Income tax Act, 1961. Such adjustments generally relate to depreciation of fixed assets, disallowances of certain provisions and accruals, the set-off of tax losses and depreciation carried forward and retirement benefit costs.

The Company has opted to exercise the option permitted under section 115BAA of the Income-tax Act, 1961. Accordingly, the Company has made a provision for Income tax and re-measured its deferred tax at the rate prescribed by the section.Income tax is charged at 22% plus surcharge of 10% plus health and education cess of 4%.

Other disclosures (for both current and non-current borrowings)

(i) Quarterly returns or statements of current assets filed by the company with banks are in agreement with books of accounts.

(ii )The company has adhered to debt repayment and interest service obligations on time. The company has not been declared as wilful defaulter by any bank or financial institution.

(iii) ALL applicable cases where registration of charges or satisfaction is required to be filed with Registrar of Companies have been filed. No registration or satisfaction is pending as at the 31.03.2023

(iv) Term loans were applied for the purposes for which they were obtained. Further short term loans availed not have been utilised for long term purposes.

39. CONTINGENT LIABILITIES:
Particulars	As at 31-03-2023	As at 31-03-2022
To the extent not provided for:
(A) In respect of Sales Invoices discounted	-	6.61
(B) Liability disputed but not provided for
(i) Central sales tax	-	0.07
(ii) Value added tax*	0.76	1.16
Total	0.76	7.84

* These cases are pending in appeal at various forums in the respective department. Outflows, if any, arising out of these claims would depend upon the adjudication of appellate authorities and the Company''s rights for further appeals.

Refer Note below for amount remitted against disputed liability

Particulars	As at 31-03-2023	As at 31-03-2022
(i) Central sales tax	-	0.04
(ii) Value added tax	0.15	0.24
40. COMMITMENTS
Particulars	As at 31-03-2023	As at 31-03-2022
Estimated value of capital commitments towards buildings (Net of advances made CY ''0.78 crores PY ''0.64 crores)	0.19	0.34

b) As lessee:

Various Buildings have been taken on operating lease with lease term between 11 and 144 months for office premises, storage space and retail shop, which are renewable on a periodic basis by mutual consent of both parties. There is no restriction imposed by lease arrangements, such as those concerning dividends, additional debts.

Ind AS 116 requires lessees to determine the lease term as the non-cancellable period of a lease adjusted with any option to extend or terminate the lease, if the use of such option is reasonably certain. The reporting entity makes an assessment on the expected lease term on a lease-by-lease basis and thereby assesses whether it is reasonably certain that any options to extend or terminate the contract will be exercised.

For the short-term and low value leases, the reporting entity recognizes the lease payments as an operating expense on a straight-line basis over the term of the lease.

42. SEGMENT REPORTING

The company is primarily engaged in the business of Trading of products Like structural steel , pipes and tubes, TMT bars, roofing solutions, sanitary wares and other allied products. In accordance with IND AS 108 "Operating Segments", the company has presented the segment information on the basis of its consolidated financial statements. Hence, the segment information for the separate (i.e. standalone) financial statements are not presented.

b) Defined benefit plan

(i) Gratuity

The Company has funded the gratuity liability ascertained on actuarial basis, wherein every employee who has completed five years or more of service is entitled to gratuity on retirement or resignation or death calculated at 15 days salary for each completed year of service, subject to a maximum of ''20 lacs per employee. The vesting period for Gratuity as payable under The Payment of Gratuity Act,1972 is 5 years.

The plans in India typically expose the Company to actuarial risks such as: investment risk, interest rate risk, longevity risk and salary risk.

Investment risk: The present value of the defined benefit plan liability is calculated using a discount rate determined by reference to government bond yields; if the return on plan asset is below this rate, it will create a plan deficit.

Interest risk: A decrease in the bond interest rate will increase the plan liability; however, this will be partially offset by an increase in the return on the plan''s debt investments.

Longevity risk: The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan''s liability.

Salary risk: The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the plan''s liability.

There are no other post-retirement benefits provided to employees.

The most recent actuarial valuation of the plan assets and the present value of the defined benefit obligation were carried out at 31-03-2023. The present value of the defined benefit obligation, and the related current service cost and past service cost, were measured using the projected unit credit method.

The Company expects to contribute ''0.56 crores (previous year ''0.56 crores) to its gratuity plan for the next year.

In assessing the Company''s post retirement liabilities, the Company monitors mortality assumptions and uses up-to date mortality tables, the base being the Indian assured lives mortality (2012-14) ultimate.

Expected return on plan assets is based on expectation of the average long term rate of return expected on investments of the fund during the estimated term of the obligations after considering several applicable factors such as the composition of plan assets, investment strategy, market scenario, etc.

The estimates of future salary increase, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

The discount rate is based on the prevailing market yields of Government of India securities as at the balance sheet date for the estimated term of the obligations.

Effective March 29, 2018, the Government of India has notified the Payment of Gratuity (Amendment) Act, 2018 to raise the statutory ceiling on gratuity benefit payable to each employee to ''20 lakhs from ''10 lakhs Accordingly the amended and improved benefits, if any, are recognised as current year''s expense as required under paragraph 103, Ind AS 19.

Sensitivity Analysis:

Significant actuarial assumptions for the determination of the defined benefit obligation are discount rate, expected salary increase and mortality. The sensitivity analysis below have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant.

The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.

The average expected remaining lifetime of the plan members is 6 years (31-03-2022 - 6 years) as at the valuation date which represents the weighted average of the expected remaining lifetime of all plan participants.

The Company had deployed its investment assets in an insurance plan which is invested in market linked bonds. The investment returns of the market-linked plan are sensitive to the changes in interest rates as compared with the investment returns from the smooth return investment plan. The liabilities'' duration is not matched with the assets'' duration.

The liabilities of the fund are funded by assets. The company aims to maintain a close to full-funding position at each Balance Sheet date. Future expected contributions are disclosed based on this principle.

The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the prior period.

Notes

1. The purchases from related parties are in the ordinary course of business. Purchase transactions are based on normal commercial terms and conditions and market rates.

2. The sales to related parties are in the ordinary course of business. Sales transactions are based on prevailing price lists. The Company has not recorded any expected credit loss for trade receivables from related parties.

3. As the future liability for gratuity is provided on an actuarial basis for the company as a whole, the amount pertaining to individual is not ascertainable and therefore not included above

4. Advance was granted to Subsidiary for working capital purpose.

Terms and Conditions

ALL outstanding balances are unsecured and are repayable in cash Guarantees furnished to subsidiaries:

Guarantees furnished to the Lenders of the subsidiaries are for availing working capital facilities from the lender banks.

Guarantees furnished by subsidiaries:

Guarantees furnished to the lenders of the company are for availing working capital facilities from the lender banks.

Guarantees furnished by managing director:

Personal guarantee furnished by the managing director to the company are for availing working capital facilities from the lender banks.

48. Financial Instruments

A. Capital Management (1) Capital risk management

The Company''s capital requirements are mainly to fund its expansion, working capital and strategic acquisitions. The principal source of funding of the Company has been, and is expected to continue to be, cash generated from its operations supplemented by borrowings from bank and funds from capital markets. The Company is not subject to any externally imposed capital requirements.

The Company regularly considers other financing and refinancing opportunities to diversify its debt profile, reduce finance cost and closely monitors its judicious allocation amongst competing expansion projects and strategic acquisitions, to capture market opportunities at minimum risk.

The Company monitors its capital using gearing ratio, which is net debt divided to total equity. Net debt includes, interest bearing loans and borrowings less cash and cash equivalents, Bank balances other than cash and cash equivalents.

C. Financial risk management

The Company has an Audit & Risk Management Committee established by its Board of Directors for overseeing the Risk Management Framework and developing and monitoring the Company''s risk management policies. The risk management policies are established to ensure timely identification and evaluation of risks, setting acceptable risk thresholds, identifying and mapping controls against these risks, monitor the risks and their limits, improve risk awareness and transparency. Risk management policies and systems are reviewed regularly to reflect changes in the market conditions and the Company''s activities to provide reliable information to the Management and the Board to evaluate the adequacy of the risk management framework in relation to the risk faced by the Company.

The risk management policies aims to mitigate the following risks arising from the financial instruments:

- Market risk

- Credit risk; and

- Liquidity risk

(1) 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 the market prices. The Company is exposed in the ordinary course of its business to risks related to changes in commodity prices and interest rates.

Sensitivity

Currency risks related to the amounts of foreign currency loans are fully hedged using derivatives that mature on the same dates as the loans are due for repayment.

(ii) Commodity price risk:

The Company''s revenue is exposed to the market risk of price fluctuations related to the sale of its steel and other building products. Market forces generally determine prices for the steel products sold by the Company. These prices may be influenced by factors such as supply and demand, production costs (including the costs of raw material inputs) and global and regional economic conditions and growth. Adverse changes in any of these factors may reduce the revenue that the Company earns from the sale of its steel products.

The Company purchases the steel and other building products in the open market from third parties as well as from subsidiaries at prevailing market price. The Company is therefore subject to fluctuations in the prices of steel coil, steel pipes,sanitary wares etc.

The Company aims to sell the products at prevailing market prices. Similarly the Company procures the products based on prevailing market rates as the selling prices of steel products and the prices of inputs move in the same direction.

Inventory Sensitivity Analysis (Stock in trade)

A reasonably possible changes of 1% in prices of inventory at the reporting date, would have increased (decreased) equity and profit or loss by the amounts shown below. The analysis assumes that all other variables remain constant.

(iii) 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 is exposed to interest rate risk since funds are borrowed at both fixed and floating interest rates. Interest rate risk is measured by using the cash flow sensitivity for changes in variable interest rate. The borrowings of the Company are principally denominated in rupees. The risk is managed by the Company by maintaining an appropriate mix between fixed and floating rate borrowings.

(2) Credit risk management:

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. Credit risk encompasses of both, the direct risk of default and the risk of deterioration of credit worthiness as well as concentration risks.

Company''s credit risk arises principally from the trade receivables, advances and financial guarantees furnished to the lenders of the subsidiaries.

(i) Trade receivables:

Customer credit risk is managed centrally by the company and subject to established policy, procedures and control relating to customer credit risk management. Credit quality of a customer is assessed based on financial position, past performance, business/ economic conditions, market reputation, expected business etc. Based on that credit limit & credit terms are decided. Outstanding customer receivables are regularly monitored.

Trade receivables consist of a large number of customers spread across diverse industries and geographical areas with no significant concentration of credit risk. The outstanding trade receivables are regularly monitored and appropriate action is taken for collection of overdue receivables.

The company does not anticipate any downfall in the current level of performance of the subsidiaries in the near future. The networth of the subsidiaries are sufficient enough to manage in the event of default.

3. Liquidity risk management

Liquidity risk refers to the risk of financial distress or extraordinary high financing costs arising due to shortage of liquid funds in a situation where business conditions unexpectedly deteriorate and requiring financing. The Company requires funds both for short term operational needs as well as for strategic acquisitions. The Company generates sufficient cash flow for operations, which together with the available cash and cash equivalents and borrowings provide liquidity. The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.

The following tables detail the Company''s remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods and its non-derivative financial assets. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company can be required to pay. The tables include both interest and principal cash flows.

With respect to floating rate, the undiscounted amount is derived from interest rate curves at the end of the reporting period. The contractual maturity is based on the earliest date on which the Company may be required to pay.

The amount of guarantees furnished on behalf of subsidiaries included in note no.47(c) represents the maximum amount the Company could be forced to settle for the full guaranteed amount. Based on the expectation at the end of the reporting period, the Company considers that it is more likely than not that such an amount will not be payable under the arrangement.

Collateral

The Company has hypothecated part of its financial assets in order to fulfil certain collateral requirements for the banking facilities extended to the Company. There is an obligation to return the securities to the Company once these banking facilities are surrendered. (refer note no 22, 27 and 44)

The carrying amounts of short-term borrowings, trade receivables, trade payables, cash and cash equivalents, other bank balances and other financial assets and liabilities other than those disclosed in the above table, are considered to be the same as their fair values, due to their short term nature.

49. CORPORATE SOCIAL RESPONSIBILITY

a) Gross amount required to be spent by Company during the year - ''0.61 Crores (Previous year: ''0.52 Crores)

Amount paid is included under Other expenses (refer note no 37)

Nature of CSR Activities - Healthcare infrastructure, education, environment sustainability, rehabilitating abandoned women and children.

50. Previous year figures

The previous year figures has been regrouped /rearranged wherever necessary to conform to the current period''s presentation.

52. No proceedings have been initiated or pending against the Company for holding Benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and the Rules made there under

53. The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

(a) 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

(b) provide any guarantee, security or the Like to or on behalf of the ultimate beneficiary

54. 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:

(a) 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

(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries

55. The Company has not operated in any crypto currency or Virtual Currency transactions

56. There are no transactions with the Companies whose name are struck off under Section 248 of the Companies Act, 2013 or Section 560 of the Companies Act, 1956 during the year ended 31-03-2023

57. During the year the Company has not disclosed or surrendered, any income other than the income recoginsed in the books of accounts in the tax assessments under Income Tax Act, 1961.

58. The Company 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.

59. e of arrangement has been approved by the competent authority in terms of Section 230 to 237 of the Companies Act, 2013

60. The Company has not granted Loans or Advances in the nature of loan to any promoters, Directors, KMPs and the related parties (As per Companies Act, 2013) , which are repayable on demand or without specifying any terms or period of repayments

61. Events occurring after the Balance Sheet date

The Board has recommended a final dividend of ''2.5/-(Rupees Two Paise Fifty only) per equity share (face value of ''10/- each) for the financial year ended 31-03-2023 aggregating to ''5.71 crores subject to the approval of shareholders in the ensuing Annual General Meeting.

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Mar 31, 2022

26. INCOME TAXES

Indian companies are subject to Indian income tax on a standalone basis. Each entity is assessed to tax on taxable profits determined for each fiscal year beginning on April 1 and ending on March 31.

Incomes are assessed based on book profits prepared under generally accepted accounting principles in India adjusted in accordance with the provisions of the Income tax Act, 1961. Such adjustments generally relate to depreciation of fixed assets, disallowances of certain provisions and accruals, the set-off of tax losses and depreciation carried forward and retirement benefit costs.

The Company has opted to exercise the option permitted under section 115BAA of the Income-tax Act, 1961. Accordingly, the Company has made a provision for Income tax and re-measured its deferred tax at the rate prescribed by the section.Income tax is charged at 22% plus surcharge of 10% plus health and education cess of 4%.

Terms and Security:

Working capital loans are repayable on demand and carries interest @ 7.25% to 11% p.a. and secured by:

a) First charge on the existing and future current assets belonging to the company.

b) Guarantee by the Managing Director.

Other disclosures (for both current and non-current borrowings)

(i) Quarterly returns or statements of current assets filed by the company with banks are in agreement with books of accounts.

(ii) The company has adhered to debt repayment and interest service obligations on time. The company has not been declared as wilful defaulter by any bank or financial institution.

iii) All applicable cases where registration of charges or satisfaction is required to be filed with Registrar of Companies have been filed. No registration or satisfaction is pending as at the 31.03.2022

(iv) Term loans were applied for the purposes for which they were obtained. Further short term loans availed not have been utilised for long term purposes

b) As lessee:

Various Buildings have been taken on operating lease with lease term between 11 and 144 months for office premises, storage space and retail shop, which are renewable on a periodic basis by mutual consent of both parties. There is no restriction imposed by lease arrangements, such as those concerning dividends, additional debts.

Ind AS 116 requires lessees to determine the lease term as the non-cancellable period of a lease adjusted with any option to extend or terminate the lease, if the use of such option is reasonably certain. The reporting entity makes an assessment on the expected lease term on a lease-by-lease basis and thereby assesses whether it is reasonably certain that any options to extend or terminate the contract will be exercised.

For the short-term and low value leases, the reporting entity recognizes the lease payments as an operating expense on a straight-line basis over the term of the lease.

42. SEGMENT REPORTING

The segment revenue, segment results or the segment assets of the manufacturing segment does not exceed the 10% of the total revenue from operations, total profit or total assets of the entity respectively. Hence the segment results for the separate (i.e. standalone) financial statements are not presented.

b) Defined benefit plan

(i) Gratuity

The Company has funded the gratuity liability ascertained on actuarial basis, wherein every employee who has completed five years or more of service is entitled to gratuity on retirement or resignation or death calculated at 15 days salary for each completed year of service, subject to a maximum of ''20 lacs per employee. The vesting period for Gratuity as payable under The Payment of Gratuity Act,1972 is 5 years.

The plans in India typically expose the Company to actuarial risks such as: investment risk, interest rate risk, longevity risk and salary risk.

Investment risk: The present value of the defined benefit plan liability is calculated using a discount rate determined by reference to government bond yields; if the return on plan asset is below this rate, it will create a plan deficit.

Interest risk: A decrease in the bond interest rate will increase the plan liability; however, this will be partially offset by an increase in the return on the plan''s debt investments.

Longevity risk: The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan''s liability.

Salary risk: The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the plan''s liability.

There are no other post-retirement benefits provided to employees.

The most recent actuarial valuation of the plan assets and the present value of the defined benefit obligation were carried out at 31-03-2022. The present value of the defined benefit obligation, and the related current service cost and past service cost, were measured using the projected unit credit method.

The Company expects to contribute ''0.56 crores (previous year ''0.21 crores) to its gratuity plan for the next year.

In assessing the Company''s post retirement liabilities, the Company monitors mortality assumptions and uses up-to date mortality tables, the base being the Indian assured lives mortality (2012-14) ultimate.

Expected return on plan assets is based on expectation of the average long term rate of return expected on investments of the fund during the estimated term of the obligations after considering several applicable factors such as the composition of plan assets, investment strategy, market scenario, etc.

The estimates of future salary increase, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

The discount rate is based on the prevailing market yields of Government of India securities as at the balance sheet date for the estimated term of the obligations.

Effective March 29, 2018, the Government of India has notified the Payment of Gratuity (Amendment) Act, 2018 to raise the statutory ceiling on gratuity benefit payable to each employee to ''20 lakhs from ''10 lakhs Accordingly the amended and improved benefits, if any, are recognised as current year''s expense as required under paragraph 103, Ind AS 19.

Sensitivity Analysis:

Significant actuarial assumptions for the determination of the defined benefit obligation are discount rate, expected salary increase and mortality. The sensitivity analysis below have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant.

The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.

The average expected remaining lifetime of the plan members is 6.5 years (31-03-2021 - 6.5 years) as at the valuation date which represents the weighted average of the expected remaining lifetime of all plan participants.

The Company had deployed its investment assets in an insurance plan which is invested in market linked bonds. The investment returns of the market-linked plan are sensitive to the changes in interest rates as compared with the investment returns from the smooth return investment plan. The liabilities'' duration is not matched with the assets'' duration.

The liabilities of the fund are funded by assets. The company aims to maintain a close to full-funding position at each Balance Sheet date. Future expected contributions are disclosed based on this principle.

The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the prior period.

Notes

1. The purchases from related parties are in the ordinary course of business. Purchase transactions are based on normal commercial terms and conditions and market rates.

2. The sales to related parties are in the ordinary course of business. Sales transactions are based on prevailing price lists. The Company has not recorded any expected credit loss for trade receivables from related parties.

3. As the future liability for gratuity is provided on an actuarial basis for the company as a whole, the amount pertaining to individual is not ascertainable and therefore not included above

4. Advance was granted to Subsidiary for working capital purpose.

Terms and Conditions

ALL outstanding balances are unsecured and are repayable in cash Guarantees furnished to subsidiaries:

Guarantees furnished to the Lenders of the subsidiaries are for availing working capital facilities from the lender banks.

Guarantees furnished by subsidiaries:

Guarantees furnished to the lenders of the company are for availing working capital facilities from the lender banks.

Guarantees furnished by managing director:

Personal guarantee furnished by the managing director to the company are for availing working capital facilities from the lender banks.

A. Capital Management (1) Capital risk management

The Company''s capital requirements are mainly to fund its expansion, working capital and strategic acquisitions. The principal source of funding of the Company has been, and is expected to continue to be, cash generated from its operations supplemented by borrowings from bank and funds from capital markets. The Company is not subject to any externally imposed capital requirements.

The Company regularly considers other financing and refinancing opportunities to diversify its debt profile, reduce finance cost and closely monitors its judicious allocation amongst competing expansion projects and strategic acquisitions, to capture market opportunities at minimum risk.

The Company monitors its capital using gearing ratio, which is net debt divided to total equity. Net debt includes, interest bearing loans and borrowings less cash and cash equivalents, Bank balances other than cash and cash equivalents.

i) Equity includes all capital and reserves of the Company that are managed as capital.

ii) Debt is defined as long and short term borrowings (excluding financial guarantee contracts), as described in Note 22 and 27

(2) Dividend is not paid during the current year, as well as in the preceeding year.

The Board has recommended final dividend of ''1/- per equity share (face value of ''10/- each) aggregating to ''2.29 crore for the financial year ended 31-03-2022, subject to the approval of the shareholders in the ensuing Annual General Meeting

The Company has an Audit & Risk Management Committee established by its Board of Directors for overseeing the Risk Management Framework and developing and monitoring the Company''s risk management policies. The risk management policies are established to ensure timely identification and evaluation of risks, setting acceptable risk thresholds, identifying and mapping controls against these risks, monitor the risks and their limits, improve risk awareness and transparency. Risk management policies and systems are reviewed regularly to reflect changes in the market conditions and the Company''s activities to provide reliable information to the Management and the Board to evaluate the adequacy of the risk management framework in relation to the risk faced by the Company.

The risk management policies aims to mitigate the following risks arising from the financial instruments:

- Market risk

- Credit risk; and

- Liquidity risk

(1) 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 the market prices. The Company is exposed in the ordinary course of its business to risks related to changes in commodity prices and interest rates.

Sensitivity

Currency risks related to the amounts of foreign currency loans are fully hedged using derivatives that mature on the same dates as the loans are due for repayment.

(ii) Commodity price risk:

The Company''s revenue is exposed to the market risk of price fluctuations related to the sale of its steel and other building products. Market forces generally determine prices for the steel products sold by the Company. These prices may be influenced by factors such as supply and demand, production costs (including the costs of raw material inputs) and global and regional economic conditions and growth. Adverse changes in any of these factors may reduce the revenue that the Company earns from the sale of its steel products.

The Company purchases the steel and other building products in the open market from third parties as well as from subsidiaries at prevailing market price. The Company is therefore subject to fluctuations in the prices of steel coil, steel pipes,sanitary wares etc.

Notes to the Standalone Financial Statements

The Company aims to sell the products at prevailing market prices. Similarly the Company procures the products based on prevailing market rates as the selling prices of steel products and the prices of inputs move in the same direction.

Inventory Sensitivity Analysis (Raw materials, Finished goods & Stock in trade)

A reasonably possible changes of 1% in prices of inventory at the reporting date, would have increased (decreased) equity and profit or loss by the amounts shown below. The analysis assumes that all other variables remain constant.

(iii) 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 is exposed to interest rate risk since funds are borrowed at both fixed and floating interest rates. Interest rate risk is measured by using the cash flow sensitivity for changes in variable interest rate. The borrowings of the Company are principally denominated in rupees. The risk is managed by the Company by maintaining an appropriate mix between fixed and floating rate borrowings.

(2) Credit risk management:

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. Credit risk encompasses of both, the direct risk of default and the risk of deterioration of credit worthiness as well as concentration risks.

Company''s credit risk arises principally from the trade receivables, advances and financial guarantees furnished to the lenders of the subsidiaries.

(i) Trade receivables:

Customer credit risk is managed centrally by the company and subject to established policy, procedures and control relating to customer credit risk management. Credit quality of a customer is assessed based on financial position, past performance, business/ economic conditions, market reputation, expected business etc. Based on that credit limit & credit terms are decided. Outstanding customer receivables are regularly monitored.

Trade receivables consist of a large number of customers spread across diverse industries and geographical areas with no significant concentration of credit risk. The outstanding trade receivables are regularly monitored and appropriate action is taken for collection of overdue receivables.

The company does not anticipate any downfall in the current level of performance of the subsidiaries in the near future. The networth of the subsidiaries are sufficient enough to manage in the event of default.

3. Liquidity risk management

Liquidity risk refers to the risk of financial distress or extraordinary high financing costs arising due to shortage of liquid funds in a situation where business conditions unexpectedly deteriorate and requiring financing. The Company requires funds both for short term operational needs as well as for strategic acquisitions. The Company generates sufficient cash flow for operations, which together with the available cash and cash equivalents and borrowings provide liquidity. The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.

The following tables detail the Company''s remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods and its non-derivative financial assets. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company can be required to pay. The tables include both interest and principal cash flows.

With respect to floating rate, the undiscounted amount is derived from interest rate curves at the end of the reporting period. The contractual maturity is based on the earliest date on which the Company may be required to pay.

The amount of guarantees furnished on behalf of subsidiaries included in note no.47(c) represents the maximum amount the Company could be forced to settle for the full guaranteed amount. Based on the expectation at the end of the reporting period, the Company considers that it is more likely than not that such an amount will not be payable under the arrangement.

Collateral

The Company has hypothecated part of its financial assets in order to fulfil certain collateral requirements for the banking facilities extended to the Company. There is an obligation to return the securities to the Company once these banking facilities are surrendered. (refer note no 22, 27 and 44)

The carrying amounts of short-term borrowings, trade receivables, trade payables, cash and cash equivalents, other bank balances and other financial assets and liabilities other than those disclosed in the above table, are considered to be the same as their fair values, due to their short term nature.

51. Previous year figures

The previous year figures has been regrouped in accordance with amendment to Schedule III vide notification no. F. No. 17/62/2015-CL-V VoL-I dated March 24, 2021 issued by the Ministry of Corporate Affairs, wherever required.

52. Note on impact of COVID-19

The company has been periodically reviewing the impact of Covid-19 on the Business operations of the Company. The situation created by Covid-19 in the last two years has somewhat abated. However the Management continues to monitor the situation and is prepared to take any action that could arise due to any future waves of Covid in the best interest of all stakeholders of the Company.

54. No proceedings have been initiated or pending against the Company for holding Benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and the Rules made there under

55. The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

(a) 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

(b) provide any guarantee, security or the Like to or on behalf of the ultimate beneficiary

56. 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:

(a) 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

(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries

57. The Company has not operated in any crypto currency or Virtual Currency transactions

58. There are no transactions with the Companies whose name are struck off under Section 248 of the Companies Act, 2013 or Section 560 of the Companies Act, 1956 during the year ended 31-03-2022

59. During the year the Company has not disclosed or surrendered, any income other than the income recoginsed in the books of accounts in the tax assessments under Income Tax Act, 1961.

60. The Company 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.

61. ne of arrangement has been approved by the competent authority in terms of Section 230 to 237 of the Companies Act, 2013

62. The Company has not granted Loans or Advances in the nature of Loan to any promoters, Directors, KMPs and the related parties (As per Companies Act, 2013) , which are repayable on demand or without specifying any terms or period of repayments

63. Events occurring after the Balance Sheet date

The Board has recommended a final dividend of ''1/-(Rupee one only) per equity share (face value of ''10/- each) for the financial year ended 31-03-2022 aggregating to ''2.29 crores subject to the approval of shareholders in the ensuing Annual General Meeting."

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Mar 31, 2019

1. GENERAL INFORMATION

Shankara Building Products Limited is one of the India''s leading organized retailer of home improvement and building products in India. It caters to a large customer base spread across various end-user segments in urban and semi-urban markets through a retail led, multi-channel sales approach complemented by processing facilities, supply chain and logistics facilities. It deals with a number of product categories including structural steel, cement, TMT bars, hollow blocks, pipes and tubes, roofing solutions, welding accessories, primers, solar heaters, plumbing, tiles, sanitary ware, water tanks, plywood, kitchen sinks, lighting and other allied products. The Company has operations spread across ten states and one union territory in India. The company''s shares are listed with BSE & NSE.

Estimation of fair value

The best evidence of fair value is current prices in an active market for similar properties. Since For Assets given on Lease , refer note no. 38(a).

The credit period on sales of goods ranges from 30 to 45 days without security. No interest is charged on trade receivables.The group classifies trade receivable due for more than one year as trade receivable with significant increase in credit risk. Trade receivable with credit impairment is identified on case to case basis.

In determining the allowances for doubtful 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.

Before accepting any new customer, the company evaluates the financial position, past performance, business opportunities, credit references etc of the new customer and defines credit limit and credit period. The credit limit and the credit period are reviewed at periodical intervals.

The Company does not generally hold any collateral or other credit enhancements over these balances nor does it have a legal right of offset against any amounts owed by the Company to the counterparty.

Trade receivables have been given as collateral towards borrowings (refer security note below Note 20 and Note 24).

In determining the recoverability of a trade receivable, the Company considers any change in the credit quality of the trade receivable from the date credit was initially granted up to the end of the reporting period. The concentration of credit risk is limited due to the fact that the customer base is large and unrelated.

The company has entered into cash management service agreement with certain banks for the collection of cheques at various branches and transfer of the funds to certain cash credit accounts by way of standing instructions. Pending such credits in the account, the cash credit accounts are disclosed as net of such collections. The above mentioned cash and cash equivalents does not contain any amount that are not available for use by the company.

b) Rights, preferences and restrictions attached to shares and terms of conversion of other securities into equity.

The company has one class of equity shares having par value of Rs.1 0 each. Each share holder is eligible for one vote per share held and carry a right to dividend. In the event of liquidation, the equity share holders are eligible to receive the remaining assets of the company after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

d) In the period of five years immediately preceding March 31, 201 9:

i) The Company has not allotted any equity shares as fully paid up without payment being received in cash.

ii) The Company has not allotted any equity shares by way of bonus issue.

iii) The Company has not bought back any equity shares.

e) The Board of Directors of the company in its meeting on May 09, 201 9, has proposed a final dividend of Rs.1.50 per equity share for the financial year ended March 31, 201 9. The proposal is subject to the approval of Shareholders at the ensuing Annual General Meeting and if approved, would result in a cash outflow of approximately Rs.41 3.19 lakhs including Dividend Distribution Tax.

f) During the year the Company has paid the dividend of Rs.3.25 (Previous year Rs.2.75) per equity share which resulted in a cash outflow of ''895.25 lakhs (Previous year Rs.756.28 lakhs) including Dividend Distribution Tax.

General Reserve

Under the erstwhile Indian Companies Act 1956, a general reserve was required to be created through an annual transfer of 10% of net profit in case dividend distribution in a given year is more than 10% of the paid-up capital of the Company for that year.

Consequent to introduction of Companies Act 2013, the requirement of mandatory transfer of a specified percentage of the net profit to general reserve has been withdrawn.

Capital Reserve

Reserve is primarily created on amalgamation as per statutory requirement.

2. INCOME TAXES

Indian companies are subject to Indian income tax on a standalone basis. Each entity is assessed to tax on taxable profits determined for each fiscal year beginning on April 1 and ending on March 31.

Statutory income taxes are assessed based on book profits prepared under generally accepted accounting principles in India adjusted in accordance with the provisions of the (Indian) Income tax Act, 1961. Such adjustments generally relate to depreciation of fixed assets, disallowances of certain provisions and accruals, the set-off of tax losses and depreciation carried forward and retirement benefit costs. Statutory income tax is charged at 30% plus a surcharge and education cess.

* The above includes Rs.35.57 lakhs (previous year Rs.35.57 lakhs) paid/adjusted towards disputed tax demands. The disputes are pending disposal before appellate authorities and the management, based on nature of dispute and the opinion of the legal counsel, is of the view that the no provision is necessary as at present.

c) Deferred Tax Liabilities

The majority of the deferred tax balance represents differential rates of depreciation for property plant and equipment under income tax act and disallowance of certain expenditure under income tax act. Significant components of deferred tax assets/(liabilities) recognized in the financial statements are as follows:

Working capital loans are repayable on demand and carries interest @ 9.35% to 11% p.a. and secured by:

a) First pari passu floating charge on the existing and future current assets belonging to the company.

b) Guarantee by Managing Director.

Acceptances include credit availed by the Company from banks for payment to suppliers for goods purchased by the Company. The arrangements are interest-bearing and are payable within 90 days.

Payables Other than acceptances are normally settled within 30 to 90 days.

For Trade payables to related parties refer Note no 43

* Including Rs. Nil ( P.Y. Rs.10 lakhs) for employee not covered under gratuity fund.

** The Hon''ble Supreme court of India ("SC") by their order dated February 28, 2019,in the case of Surya Roshani Limited & other v/s EPFO, set out the principles based on which allowances paid to the employees should be identified for inclusion in basic wages for the purposes of computation of Providend Fund contribution. Subsequently, a review petition against this decision has been filed and is pending before the SC for disposal. Pending decision on the subject review petition and directions from the EPFO, the impact, if any, is not ascertainable and consequently no effect has been given in the accounts.

*The above represents full value of guarantee outstanding. The fair value of the above guarantees has been appropriately accounted in accordance with Ind AS 37 & Ind AS 27.

** These cases are pending at various forums in the respective departments. Outflows, if any, arising out of these claims would depend upon the outcome of the decision of the appellate authorities and the Company''s rights for future appeals before the judiciary. No reimbursements are expected.

3. OPERATING LEASE

a) As lessor:

The company has entered into leasing arrangements for renting:

- Land and Building admeasuring approximately 1,000 Square feet at the rate of 16.10 per square feet for a period of 11 months, which is cancellable.

- Land and Building admeasuring approximately 13,610 Square feet at the rate of 8.08 per square feet for a period of 11 months, which is cancellable.

Disclosure in respect of assets given on operating lease :

b) As lessee:

Various Buildings have been taken on operating lease with lease term between 11 and 60 months for office premises, storage space and retail shop, which are renewable on a periodic basis by mutual consent of both parties. All the operating leases are cancellable by either parties for any reason by giving a prior notice before 1 to 3 months. There is no restriction imposed by lease arrangements, such as those concerning dividends, additional debts.

Lease payments recognized under rent expenses is as follows:

4. SEGMENT REPORTING

In accordance with Para 4 of Ind AS 108 - Operating Segments, the company presents segment information only in the consolidated financial statements.

5. ADDITIONAL INFORMATION

Disclosure pertaining to micro and small enterprises as required under MSMED Act, 2006 (as per information available with the Company):

b) Amount utilised for share issue expenses includes payment made for merchant banker fees, legal counsel fees, brokerage and selling commission, auditors fees, registrar to the issue, printing and stationary expenses, advertising and marketing expenses, statutory fees to regulator and stock exchanges and other incidental expenses towards Initial Public Offering (''IPO''). Of the total expenses relating to share issue, expenses aggregating to Rs.311.25 lakhs (including Rs.41.40 lakhs during the financial year 2017-18) have been adjusted against the Securities Premium Account and expenses aggregating to Rs.1,823.60 lakhs have been recovered from the selling shareholders. The recovery of expenses is in proportion to shares offered for sale by the selling shareholders to total shares offered for IPO.

b) Defined benefit plans

The Company has funded the gratuity liability ascertained on actuarial basis, wherein every employee who has completed five years or more of service is entitled to gratuity on retirement or resignation or death calculated at 15 days salary for each completed year of service, subject to a maximum of Rs.20 lacs per employee. The vesting period for Gratuity as payable under The Payment of Gratuity Act is 5 years.

The plans in India typically expose the Company to actuarial risks such as: investment risk, interest rate risk, longevity risk and salary risk.

Investment risk: The present value of the defined benefit plan liability is calculated using a discount rate determined by reference to government bond yields; if the return on plan asset is below this rate, it will create a plan deficit.

Interest risk: A decrease in the bond interest rate will increase the plan liability; however, this will be partially offset by an increase in the return on the plan''s debt investments.

Longevity risk: The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan''s liability.

Salary risk: The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the plan''s liability.

There are no other post-retirement benefits provided to employees.

The most recent actuarial valuation of the plan assets and the present value of the defined benefit obligation were carried out at 31 March 2018 by M/S Ankolekar & Co., Actuaries and Consultants. The present value of the defined benefit obligation, and the related current service cost and past service cost, were measured using the projected unit credit method.

The Company expects to contribute Rs.121.61 lakhs (previous year Rs.46.63 lakhs) to its gratuity plan for the next year.

In assessing the Company''s post retirement liabilities, the Company monitors mortality assumptions and uses up-to date mortality tables, the base being the Indian assured lives mortality (2006-08) ultimate.

Expected return on plan assets is based on expectation of the average long term rate of return expected on investments of the fund during the estimated term of the obligations after considering several applicable factors such as the composition of plan assets, investment strategy, market scenario, etc.

The estimates of future salary increase, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

The discount rate is based on the prevailing market yields of Government of India securities as at the balance sheet date for the estimated term of the obligations.

Effective March 29, 2018, the Government of India has notified the Payment of Gratuity (Amendment) Act, 2018 to raise the statutory ceiling on gratuity benefit payable to each employee to Rs.20 lakhs from Rs.10 lakhs Accordingly the amended and improved benefits, if any, are recognised as current year''s expense as provided under paragraph 103, Ind AS 19.

Sensitivity Analysis:

Significant actuarial assumptions for the determination of the defined benefit obligation are discount rate, expected salary increase and mortality. The sensitivity analyses below have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant.

The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.

The average expected remaining lifetime of the plan members is 6 years as at the valuation date which represents the weighted average of the expected remaining lifetime of all plan participants.

The Company had deployed its investment assets in an insurance plan which is invested in market linked bonds. The investment returns of the market-linked plan are sensitive to the changes in interest rates as compared with the investment returns from the smooth return investment plan. The liabilities'' duration is not matched with the assets'' duration.

The liabilities of the fund are funded by assets. The company aims to maintain a close to full-funding position at each Balance Sheet date. Future expected contributions are disclosed based on this principle.

Notes

1. The purchases from related parties are in the ordinary course of business. Purchase transactions are based on normal commercial terms and conditions and market rates.

2. The sales to related parties are in the ordinary course of business. Sales transactions are based on prevailing price lists. The Company has not recorded any expected credit loss for trade receivables from related parties.

3. As the future liability for gratuity is provided on an actuarial basis for the company as a whole, the amount pertaining to individual is not ascertainable and therefore not included above

4. Advances are given to subsidiaries for business purposes and are non-interest bearing.

Guarantees to subsidiaries:

Guarantees provided to the lenders of the subsidiaries are for availing working capital facilities from the lender banks. Guarantees from subsidiaries:

Guarantees provided to the lenders of the company are for availing working capital facilities from the lender banks.

6. FINANCIAL INSTRUMENTS

A. Capital risk management

The Company''s capital requirements are mainly to fund its expansion, working capital and strategic acquisitions. The principal source of funding of the Company has been, and is expected to continue to be, cash generated from its operations supplemented by borrowing from bank and the funds from capital markets. The Company is not subject to any externally imposed capital requirements.

The Company regularly considers other financing and refinancing opportunities to diversify its debt profile, reduce interest cost and closely monitors its judicious allocation amongst competing expansion projects and strategic acquisitions, to capture market opportunities at minimum risk.

The Company monitors its capital using gearing ratio, which is net debt divided to total equity. Net debt includes, interest bearing loans and borrowings less cash and cash equivalents, Bank balances other than cash and cash equivalents.

i) Equity includes all capital and reserves of the Company that are managed as capital.

ii) Debt is defined as long and short term borrowings (excluding financial guarantee contracts), as described in Note 20 and 24

* including current maturities of long term debt

The Company has certain Investment Properties whose fair value have been disclosed in Note no 5.

C. Financial risk management

The Company has an Audit & Risk Management Committee established by its Board of Directors for overseeing the Risk Management Framework and developing and monitoring the Company''s risk management policies. The risk management policies are established to ensure timely identification and evaluation of risks, setting acceptable risk thresholds, identifying and mapping controls against these risks, monitor the risks and their limits, improve risk awareness and transparency. Risk management policies and systems are reviewed regularly to reflect changes in the market conditions and the Company''s activities to provide reliable information to the Management and the Board to evaluate the adequacy of the risk management framework in relation to the risk faced by the Company.

The risk management policies aims to mitigate the following risks arising from the financial instruments:

D. 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 the market prices. The Company is exposed in the ordinary course of its business to risks related to changes in commodity prices and interest rates.

E. Commodity price risk:

The Company''s revenue is exposed to the market risk of price fluctuations related to the sale of its steel and other building products. Market forces generally determine prices for the steel products sold by the Company. These prices may be influenced by factors such as supply and demand, production costs (including the costs of raw material inputs) and global and regional economic conditions and growth. Adverse changes in any of these factors may reduce the revenue that the Company earns from the sale of its steel products.

The Company purchases the steel and other building products in the open market from third parties as well as from subsidiaries in prevailing market price. The Company is therefore subject to fluctuations in the prices of Steel coil, Steel pipes, zinc, Sanitary wares etc.

The Company aims to sell the products at prevailing market prices. Similarly the Company procures the products based on prevailing market rates as the selling prices of steel products and the prices of inputs move in the same direction.

Inventory Sensitivity Analysis(Stock in Trade)

A reasonably possible changes of 1% in prices of inventory at the reporting date, would have increased (decreased) equity and profit or loss by the amounts shown below. The analysis assumes that all other variables remain constant.

F. 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 is exposed to interest rate risk since funds are borrowed at both fixed and floating interest rates. Interest rate risk is measured by using the cash flow sensitivity for changes in variable interest rate. The borrowings of the Company are principally denominated in rupees. The risk is managed by the Company by maintaining an appropriate mix between fixed and floating rate borrowings.

The following table provides a break-up of the Company''s fixed and floating rate borrowings:

G. Credit risk management:

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. Credit risk encompasses of both, the direct risk of default and the risk of deterioration of credit worthiness as well as concentration risks.

Company''s credit risk arises principally from the trade receivables and advances Trade receivables:

Customer credit risk is managed centrally by the company and subject to established policy, procedures and control relating to customer credit risk management. Credit quality of a customer is assessed based on financial position, past performance, business/ economic conditions, market reputation, expected business etc. Based on that credit limit & credit terms are decided. Outstanding customer receivables are regularly monitored

Trade receivables consist of a large number of customers spread across diverse industries and geographical areas with no significant concentration of credit risk. The outstanding trade receivables are regularly monitored and appropriate action is taken for collection of overdue receivables.

H. Liquidity risk management

Liquidity risk refers to the risk of financial distress or extraordinary high financing costs arising due to shortage of liquid funds in a situation where business conditions unexpectedly deteriorate and requiring financing. The Company requires funds both for short term operational needs as well as for strategic acquisitions. The Company generates sufficient cash flow for operations, which together with the available cash and cash equivalents and borrowings provide liquidity. The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.

The following tables detail the Company''s remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods and its non-derivative financial assets. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company can be required to pay. The tables include both interest and principal cash flows.

With respect to floating rate, the undiscounted amount is derived from interest rate curves at the end of the reporting period. The contractual maturity is based on the earliest date on which the Company may be required to pay.

The amount of guarantees given on behalf of subsidiaries included in Note No. 22 represents the maximum amount the Company could be forced to settle for the full guaranteed amount. Based on the expectation at the end of the reporting period, the Company considers that it is more likely than not that such an amount will not be payable under the arrangement.

Collateral

The Company has pledged part of its financial assets in order to fulfil certain collateral requirements for the banking facilities extended to the Company. There is an obligation to return the securities to the Company once these banking facilities are surrendered. (Refer note 20 and 24)

The carrying amounts of short-term borrowings, trade receivables, trade payables, cash and cash equivalents, other bank balances and other financial assets and liabilities other than those disclosed in the above table, are considered to be the same as their fair values, due to their short term nature.

7. CORPORATE SOCIAL RESPONSIBILITY

a) Gross amount required to be spent by Company during the year - Rs.73.14 lakhs ( Previous year: Rs.38.33 lakhs)

b) Amount spent during the year:

8. BUSINESS COMBINATIONS

a) On 27th October, 2017, the company acquired the identified assets and liabilities of business of Vaigai Sanitation Private Limited including the brand for a total consideration of Rs.1,000.00 lakhs, subject to stipulated conditions. The results of the acquired business have been accounted by the company from the effective date of 1st November, 2017.

b) On 28th January, 2018, the company acquired the identified assets and liabilities of business of JP Sanitation India Private Limited for a total consideration of Rs.2,222.33 lakhs, subject to stipulated conditions. The results of the acquired business have been accounted by the company from the effective date of 1st February, 2018.

c) The summary of Fair values of the identifiable assets and liabilities acquired on account of the above mentioned business combination is as follows:

Note:

1 Tangible and Intangible assets acquired in a business combination are initially recognised at their fair value at the acquisition date, which is regarded as their cost. [Refer Note 4 & 6]

Subsequent to initial recognition, intangible assets acquired in a business combination are reported at cost less accumulated amortisation and accumulated impairment losses, on the same basis as intangible assets that are acquired separately.

9. PREVIOUS YEAR FIGURES HAVE BEEN REGROUPED WHEREVER CONSIDERED NECESSARY.

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Mar 31, 2018

1 GENERAL INFORMATION

“Shankara Building Products Limited is one of the India’s leading organized retailer of home improvement and building products in India. It caters to a large customer base spread across various end-user segments in urban and semi-urban markets through a retail led, multi-channel sales approach complemented by processing facilities, supply chain and logistics facilities. It deals with a number of product categories including structural steel, cement, TMT bars, hollow blocks, pipes and tubes, roofing solutions, welding accessories, primers, solar heaters, plumbing, tiles, sanitary ware, water tanks, plywood, kitchen sinks, lighting and other allied products. The Company has operations spread across ten states in India. The company’s shares are listed with BSE & NSE.”

2 KEY SOURCES OF ESTIMATION UNCERTAINTY AND CRITICAL ACCOUNTING JUDGEMENTS

In the course of applying the policies outlined in all notes under section 2 above, the Company is required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future period, if the revision affects current and future period.

(i) Useful lives of property, plant and equipment

Management reviews the useful lives of property, plant and equipment at least once a year. Such lives are dependent upon an assessment of both the technical lives of the assets and also their likely economic lives based on various internal and external factors including relative efficiency and operating costs. Accordingly depreciable lives are reviewed annually using the best information available to the Management.

(ii) Impairment of investments in subsidiaries

Determining whether the investments in subsidiaries are impaired, requires an estimate in the value in use of investments. In considering the value in use, the Directors have anticipated the future commodity prices, capacity utilization of plants, operating margins, discount rates and other factors of the underlying businesses / operations of the investee companies. Any subsequent changes to the cash flows due to changes in the above mentioned factors could impact the carrying value of investments.

(lii) Provisions and liabilities

Provisions and liabilities are recognized in the period when it becomes probable that there will be a future outflow of funds resulting from past operations or events that can reasonably be estimated. The timing of recognition requires application of judgement to existing facts and circumstances which may be subject to change. The amounts are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability.

(iv) Business combinations and intangible assets

Business combinations are accounted for using Ind AS 103, Business Combinations, which requires the identifiable intangible assets and contingent consideration to be measured at fair value in order to ascertain the net fair value of identifiable assets, liabilities and contingent liabilities of the business. Significant estimates are required to be made in determining the value of contingent consideration and intangible assets. These valuations are conducted by independent valuation experts.

(v) Contingencies

In the normal course of business, contingent liabilities may arise from litigation and other claims against the Company. Potential liabilities that are possible but not probable of crystalising or are very difficult to quantify reliably are treated as contingent liabilities. Such liabilities are disclosed in the notes but are not recognized.

(vi) Fair value measurements

When the fair values of financial assets or financial liabilities recorded or disclosed in the financial statements cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the DCF model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgment is required in establishing fair values. Judgements include consideration of inputs such as liquidity risk, credit risk and volatility.

(vii) Taxes

Deferred tax assets are recognized for unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilized. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits together with future tax planning strategies.

Estimation of fair value

The best evidence of fair value is current prices in an active market for similar properties. Since investment properties are leased out by the Company, the market rate for sale/purchase of such premises are representative of fair values. Company’s investment properties are at a location where active market is available for similar kind of properties. Hence fair value is ascertained on the basis of market rates prevailing for similar properties in those location determined by an independent registered valuer and consequently classified as a level 2 valuation.

The credit period on sales of goods ranges from 30 to 45 days without security. No interest is charged on trade receivables

In determining the allowances for doubtful 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. There has been no significant change in the credit quality of receivables past due for more than 180 days.

Before accepting any new customer, the company evaluates the financial position, past performance, business opportunities, credit references etc of the new customer and defines credit limit and credit period. The credit limit and the credit period are reviewed at periodical intervals.

The Company does not generally hold any collateral or other credit enhancements over these balances nor does it have a legal right of offset against any amounts owed by the Company to the counterparty.

Trade receivables have been given as collateral towards borrowings (refer security note below Note 20 and Note 24).

In determining the recoverability of a trade receivable, the Company considers any change in the credit quality of the trade receivable from the date credit was initially granted up to the end of the reporting period. The concentration of credit risk is limited due to the fact that the customer base is large and unrelated.

The company has entered into cash management service agreement with certain banks for the collection of cheques at various branches and transfer of the funds to certain cash credit accounts by way of standing instructions. Pending such credits in the account, the same is disclosed as net of such collections. The above mentioned cash and cash equivalents does not contain any amount that are not available for use by the company.

c) Rights, preferences and restrictions attached to shares and terms of conversion of other securities into equity.

The company has one class of equity shares having par value of Rs.10 each. Each share holder is eligible for one vote per share held and carry a right to dividend. In the event of liquidation, the equity share holders are eligible to receive the remaining assets of the company after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the share holders.

e) For the period of five years immediately preceding the date of Balance Sheet,

Aggregate number & class of shares allotted by the company as fully paid up pursuance to contracts without receipt of cash N i I

Aggregate number & class of shares bought back by the company Nil

Aggregate number & class of shares allotted by the company as fully paid up by way of bonus shares Nil

f) The Board of Directors, in its meeting on May 10, 2018, has proposed a final dividend of 73,25 (PY - 72,75)per equity share for the financial year ended March 31, 2018. The proposal is subject to the approval of Shareholders at the ensuing Annual General Meeting and if approved, would result in a cash outflow of approximately 78.95 Crones (PY -77.60 Crores) including Dividend Distribution Tax.

General Reserve

Under the erstwhile Indian Companies Act 1956, a general reserve was required to be created through an annual transfer of 10% of net profit in case dividend distribution in a given year is more than 10% of the paid-up capital of the Company for that year.

Consequent to introduction of Companies Act 2013, the requirement of mandatory transfer of a specified percentage of the net profit to general reserve has been withdrawn.

Capital Reserve

Reserve is primarily created on amalgamation as per statutory requirement.

3. INCOME TAXES

Indian companies are subject to Indian income tax on a standalone basis. Each entity is assessed to tax on taxable profits determined for each fiscal year beginning on April 1 and ending on March 31.

Statutory income taxes are assessed based on book profits prepared under generally accepted accounting principles in India adjusted in accordance with the provisions of the (Indian) income tax Act, 1961. Such adjustments generally relate to depreciation of fixed assets, disallowances of certain provisions and accruals, deduction for tax holidays, the set-off of tax losses and depreciation carried forward and retirement benefit costs. Statutory income tax is charged at 30% plus a surcharge and education cess.

* The above includes 735,57,270/- paid/adjusted towards disputed tax demands. The disputes are pending disposal before appellate authorities and the management, based on nature of dispute and the opinion of the legal counsel, is of the view that the no provision is necessary as at present.

DEFERRED TAX LIABILITIES

The majority of the deferred tax balance represents differentia! rates of depreciation for property, plant and equipment under income tax act and disallowance of certain expenditure under income tax act. Significant components of deferred tax assets/diabilities) recognized in the financial statements are as follows:

Working capital loans are repayable on demand and carries interest © 7.9% to 12% p.a and secured by:

a) First pari passu floating charge on the existing and future current assets belonging to the company.

b) Guarantee by Managing Director.

4. OPERATING LEASE

a) As lessor:

The company has entered into leasing arrangements for renting:

- Building admeasuring approximately 1000 Square feet at the rate of Rs.16.10 per square feet for a period of 11 months, which is renewable.

- Building admeasuring approximately 13,610 Square feet at the rate of Rs.8.08 per square feet for a period of 11 months, which is renewable.

b) As lessee:

Various Buildings have been taken on operating lease with lease term between 11 and 60 months for office premises, storage space arid retail shop, which ate renewable on a periodic basis by mutual consent of both parties. All the operating leases are cancellable by either parties for any reason by giving a prior notice before 1 to 3 months. There is no restriction imposed by lease arrangements, such as those concerning dividends, additional debts.

5. Segment Reporting

In accordance with Para 4 of Ind AS 106 - Operating Segments, the company presents segment information only in the consolidated financial statements.

6. Additional Information

a) CIF Value of imports - Nil (PY - Nil)

b) Foreign currency earnings - Nil (PY - Nil)

c) Details of Foreign currency expenditure - Nil (PY - Nil)

d) Disclosure pertaining to micro and small enterprises as required under MSMED Act, 2006 (as per information available with the Company):

7 .a) Pursuant to Initial Public Offering (‘IPO’), 75,00,029 equity shares of T10 each which were allotted on 31st March 2017 at a premium of Rs.450 per share consisting of fresh issue of 3,76,289 equity shares and offer for sale of 65,21,740 equity shares by the selling shareholders. The proceeds of the IPO have been utilised as under:

b) Amount utilised for share issue expenses includes payment made for merchant banker fees, legal counsel fees, brokerage and selling commission, auditors fees, registrar to the issue, printing and stationary expenses, advertising and marketing expenses, statutory fees to regulator and stock exchanges and other incidenta! expenses towards Initial Public Offering (‘IPO’). Of the total expenses relating to share issue, expenses aggregating to Rs.3,11,24,582 (including Rs.41,40,043 during the financial year 2017-18} have been adjusted against the Securities Premium Account and expenses aggregating to jf18,23,60,059 have been recovered from the selling shareholders. The recovery of expenses is in proportion to shares offered for sale by the selling shareholders to total shares offered for IPO.

8. Employee benefits

a) Defined contribution plan

Contribution to Defined Contribution Plans, recognised as an expense for the year is as under:

b) Defined benefit plans

The Company has funded the gratuity liability ascertained on actuarial basis, wherein every employee who has completed five years or more of service is entitled to gratuity on retirement or resignation or death calculated at 15 days salary for each completed year of service, subject to a maximum of Rs.20 lacs per employee. The vesting period for Gratuity as payable under The Payment of Gratuity Act is 5 years.

The plans in India typically expose the Company to actuarial risks such as: investment risk, interest rate risk, longevity risk and salary risk.

Investment risk: The present value of the defined benefit plan liability is calculated using a discount rate determined by reference to government bond yields; if the return on plan asset is below this rate, it will create a plan deficit.

Interest risk: A decrease in the bond interest rate will increase the plan liability; however, this will be partially offset by an increase in the return on the plan’s debt investments.

Longevity risk: The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and after their employment An increase in the life expectancy of the plan participants will increase the plan’s liability.

Salary risk: The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the plan’s liability.

There are no other post-retirement benefits provided to employees.

The most recent actuarial valuation of the plan assets and the present value of the defined benefit obligation were carried out at 31 March 2018 by M/S Ankolekar & Co., Actuaries and Consultants. The present value of the defined benefit obligation, and the related current service cost and past service cost, were measured using the projected unit credit method.

The Company expects to contribute Rs.60,00,000 (previous year 00,00,000) to its gratuity pian for the next year.

In assessing the Company’s post retirement liabilities, the Company monitors mortality assumptions and uses up-to date mortality tables, the base being the Indian assured lives mortality (2006-08) ultimate.

Expected return on plan assets is based on expectation of the average long term rate of return expected on investments of the fund during the estimated term of the obligations after considering several applicable factors such as the composition of plan assets, investment strategy, market scenario, etc.

The estimates of future salary increase, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

The discount rate is based on the prevailing market yields of Government of India securities as at the balance sheet date for the estimated term of the obligations.

Effective March 29,2018, the Government of India has notified the Fbyment of Gratuity (Amendment) Act, 2018 to raise the statutory ceiling on gratuity benefit payable to each employee to 720 lacs from Rs.10 lacs. Accordingly the amended and improved benefits, if any, are recognised as current years expense as provided under paragraph 103, Ind AS 19.

The amount included in the financial statements arising from the entity’s obligation in respect of its defined benefit plan is as follows:

The actual return on plan assets for the year ended 31 March 2018 was Rs.12,42,000 (for the year ended 31 March 2017 : *25,78,000)

Sensitivity Analysis:

Significant actuarial assumptions for the determination of the defined benefit obligation are discount rate, expected salary increase and mortality. The sensitivity analyses below have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant.

The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.

The average expected remaining lifetime of the plan members is 6 years as at the valuation date which represents the weighted average of the expected remaining lifetime of all plan participants.

The Company had deployed its investment assets in an insurance plan which is invested in market linked bonds. The investment returns of the market-linked plan are sensitive to the changes in interest rates as compared with the investment returns from the smooth return investment plan. The liabilities’ duration is not matched with the assets’ duration.

The liabilities of the fund are funded by assets. The company aims to maintain a close to full-funding position at each Balance Sheet date. Future expected contributions are disclosed based on this principle.

Notes

1. Hie purchases from related parties are in the ordinary course of business. Purchase transactions are based on normal commercial terms and conditions and market rates.

2. The sales to related parties are in the ordinary course of business. Sales transactions are based on prevailing price lists. The Company has not recorded any loss allowances for trade receivables from related pasties.

3. As the future liability for gratuity is provided on an actuarial basis for the company as a whole, the amount pertaining to individual is not ascertainable and therefore not included above

9. Financial Instruments

a) Capita! risk management

The Company’s capital requirements are mainly to fund its expansion, working capital and strategic acquisitions. The principal source of funding of the Company has been, and is expected to continue to be, cash generated from its operations supplemented by short term borrowing from bank and the funds from capital markets. The Company is not subject to any externally imposed capital requirements.

The Company regularly considers other financing and refinancing opportunities to diversify its debt profile, reduce interest cost and closely monitors its judicious allocation amongst competing expansion projects and strategic acquisitions, to capture market opportunities at minimum risk.

The Company monitors its capital using gearing ratio, which is net debt divided to total equity. Net debt includes, interest bearing loans and borrowings less cash and cash equivalents, Bank balances other than cash and cash equivalents.

i) Equity includes all capital and reserves of the Company that are managed as capital*

ii) Debt is defined as long and short term borrowings (excluding financial guarantee contracts), as described in Note 20 and 24.

C) Financial risk management

The Company has an Audit & Risk Management Committee established by its Board of Directors for overseeing the Risk Management Framework and developing and monitoring the Company’s risk management policies. The risk management policies are established to ensure timely identification and evaluation of risks, setting acceptable risk thresholds, identifying and mapping controls against these risks, monitor the risks and their limits, improve risk awareness and transparency. Risk management policies and systems are reviewed regularly to reflect changes in the market conditions and the Company’s activities to provide reliable information to the Management and the Board to evaluate the adequacy of the risk management framework in relation to the risk faced by the Company.

The risk management policies aims to mitigate the following risks arising from the financial instruments:

- Market risk

- Credit risk; and

- Liquidity risk

D) 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 the market prices. The Company is exposed in the ordinary course of its business to risks related to changes in foreign currency exchange rates, commodity prices and interest rates.

E) Commodity price risk:

The Company’s revenue is exposed to the market risk of price fluctuations related to the sale of its steel and other building products. Market forces generally determine prices for the steel products sold by the Company. These prices may be influenced by factors such as supply and demand, production costs (including the costs of raw material inputs) and global and regional economic conditions and growth. Adverse changes in any of these factors may reduce the revenue that the Company earns from the sale of its steel products.

The Company purchases the steel and other building products in the open market from third parties as weli as from subsidiaries in prevailing market price. The Company is therefore subject to fluctuations in the prices of Steel coil, Steel pipes, zinc, Sanitarywares etc.

The Company aims to sell the products at prevailing market prices. Similarly the Company procures the products based on prevailing market rates as the selling prices of steel products and the prices of inputs move in the same direction.

F) 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 is exposed to interest rate risk since funds are borrowed at both fixed and floating interest rates. Interest rate risk is measured by using the cash flow sensitivity for changes in variable interest rate. The borrowings of the Company are principally denominated in rupees. The risk is managed by the Company by maintaining an appropriate mix between fixed and floating rate borrowings.

G) Credit risk management

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. Credit risk encompasses of both, the direct risk of default and the risk of deterioration of credit worthiness as well as concentration risks.

Company’s credit risk arises principally from the trade receivables and advances

Trade receivables:

Customer credit risk is managed centrally by the company and subject to established policy, procedures and control relating to customer credit risk management Credit quality of a customer is assessed based on financial position, past performance, business/ economic conditions, market reputation, expected business etc. Based on that credit limit & credit terms are decided. Outstanding customer receivables are regularly monitored

Trade receivables consist of a large number of customers spread across diverse industries and geographical areas with no significant concentration of credit risk. The outstanding trade receivables are regularly monitored and appropriate action is taken for collection of overdue receivables.

H) Liquidity risk management

Liquidity risk refers to the risk of financial distress or extraordinary high financing costs arising due to shortage of liquid funds in a situation where business conditions unexpectedly deteriorate and requiring financing. The Company requires funds both for short term operational needs as well as for strategic acquisitions. The Company generates sufficient cash flow for operations, which together with the available cash and cash equivalents and short term borrowings provide liquidity. The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.

The following tables detail the Company’s remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods and its non-derivative financial assets. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company can be required to pay. The tables include both interest and principal cash flows.

To the extent that interest flows are floating rate, the undiscounted amount is derived from interest rate curves at the end of the reporting period. The contractual maturity is based on the earliest date on which the Company may be required to pay.

The amount of guarantees given on behalf of subsidiaries included in Note No. 22 represents the maximum amount the Company could be forced to settle for the full guaranteed amount. Based on the expectation at the end of the reporting period, the Company considers that it is more likely than not that such an amount will not be payable under the arrangement.

Collateral

The Company has pledged part of its trade receivables, short term investments and cash and cash equivalents in order to fulfil certain collateral requirements for the banking facilities extended to the Company. There is an obligation to return the securities to the Company once these banking facilities are surrendered. (Refer note 20 and 24}

The carrying amounts of short-term borrowings, trade receivables, trade payables, cash and cash equivalents, other bank balances and other financial assets and liabilities other than those disclosed in the above table, are considered to be the same as their fair values, due to their short term nature.

10. Business Combinations

a) On 27th October, 2017, the company acquired the identified assets and liabilities of business ofVaigai Sanitation Private Limited including the brand for a total consideration of 710 crores, subject to stipulated conditions. The results of the acquired business have been accounted by the company from the effective date of 1st November, 2017.

b) On 28th January, 2018, the company acquired the identified assets and liabilities of business of JP Sanitation India Private Limited for a total consideration of 722.22 crores, subject to stipulated conditions. The results of the acquired business have been accounted by the company from the effective date of 1st February, 2018.

c) The summary of Fair values of the identifiable assets and liabilities acquired on account of the above mentioned business combination is as follows:

Note:

1. Tangible and intangible assets acquired in a business combination are initially recognised at their fair value at the acquisition date, which is regarded as their cost. [Refer Note 6]

Subsequent to initial recognition, intangible assets acquired in a business combination are reported at cost less accumulated amortisation and accumulated impairment losses, on the same basis as intangible assets that are acquired separately.

Notes:

1. The previous GAAP figures have been redassified to conform to Ind AS presentation

2. Recognition of expected credit losses

The company has recognised a loss allowance for expected credit losses on financial assets in accordance with the requirements of Ind AS 109 retrospectively. However, as permitted by Ind AS 101, it has used reasonable and supportable information that is available without undue cost or effort to determine the credit risk at the date that financial instruments were initially recognised.

3 Financial liabilities and related transaction costs:

Borrowings and other financial liabilities which were recognized at historical cost under previous GAAP have been recognized at amortised cost under IND AS with the difference been adjusted to opening retained earnings.

Under previous GAAP, transaction costs incurred in connection with borrowings were accounted sepa rately. Under IND AS, transaction costs are deducted from the initial recognition amount of the borrowings and charged over the tenure of borrowing using the effective interest method.

Difference in the un-amortised borrowing cost as per IND AS and previous GAAP on transition date has been adjusted with opening retained earnings.

4 Financial assets at amortised cost:

Certain financial assets held on with an objective to collect contractual cash flows in the nature of principal and interest have been recognized at amortised cost on transition date as against historical cost under the previous GAAP with the difference been adjusted to the opening retained earnings.

5 Fair valuation of Guarantees

Guarantees given to subsidiaries have been recognised at their fair value which is measured based on cash shortfalls that are expected to reimburse the holder for a credit loss that it incurs less any amounts that the entity expects to receive from the holder.

6 Deferred tax as per balance sheet approach:

Under previous GAAP, deferred tax was accounted using the income statement approach, on the timing differences between the taxable profit and accounting profits for the period. Under IND AS, deferred tax is recognized following balance sheet approach on the temporary differences between the carrying amount of asset or liability in the balance sheet and its tax base. In addition, various transitional adjustments has also lead to recognition of deferred taxes on new temporary differences.

7 Defined benefit liabilities:

Under IND AS, Remeasurements i.e. actuarial gains and losses and the return on plan assets, excluding amounts included in the net interest expense on the net defined liability, are recognized in other compre hensive income instead of profit or loss in previous GAAP.

8 Investment properties

Property that is held for long-term rental yields or for capital appreciation or both, and that is not occupied by the company, is classified as investment property. Investment property is measured initially at its cost, including related transaction costs and where applicable, the borrowing costs

9 Other comprehensive income:

Under IND AS, all items of income and expense recognized in the 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 and “other comprehensive income” includes remeasurements of defined benefit plans, Foreign currency translation Reserve. The concept of other comprehensive income did not exist under previous GAAP.

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Mar 31, 2017

1. A. DISCLOSURE PURSUANT TO ACCOUNTING STANDARD 15 (REVISED)

EMPLOYEE BENIFITS

The Company has funded the gratuity liability ascertained on actuarial basis, wherein every employee who has completed five years or more of service is entitled to gratuity on retirement or resignation or death calculated at 15 days salary for each completed year of service.

The Disclosure relating to defined benefit plans under AS-15:

2. LEASING ARRANGEMENTS Operating Lease:

Where the Company is the lessee

The significant leasing arrangements entered into by the company include the following:

Building taken on operating lease with lease term between 11 and 24 months for office premises and residential accommodation for employees and which are renewable on a periodic basis by mutual consent of both parties. All the operating leases are cancellable by the Lessee for any reason by giving notice of between 1 and 3 months. There is no restriction imposed by lease arrangements, such as those concerning dividends, additional debts.

3. RELATED PARTY DISCLOSURES: (All amount are stated in Indian Rupees, unless stated otherwise) (Rs,)

Information given in accordance with the requirements of Accounting Standard 18 on Related Party Disclosures:

a. Names of related parties and nature of relationship:

Company having significant influence Fairwinds Trustee Services Private Limited

(Up to 31st March 2017)

Subsidiary and step down subsidiary Companies Vishal Precision Steel Tubes and Strips Private Limited

Taurus Value Steel & Pipes Private Limited Steel Networks Holdings Pte Limited Century wells Roofing India Private Limited

Companies over which key managerial personnel Shankara Meta-Steel India Private Limited can exercise significant influence Shankara Holdings Private Limited

Key managerial personnel Mr. Sukumar Srinivas (Managing Director)

Mr. C.Ravikumar (Whole time Director)

Mr. R.S.V.Sivaprasad (Whole time Director)

Mr. Alex Varghese (Chief Financial Officer)

Ms. Ereena Vikram

(Company Secretary - from 08th September 2016)

4. During the year ended March 31, 2017, pursuant to Initial Public Offering ("IPO"), 9,78,289 equity shares of Rs, 10 each were allotted to public at a premium of Rs, 450 per share along with offer for sale of 65,21,740 equity shares by the selling shareholders. The proceeds of the IPO was in Escrow Account as at March 31, 2017 and was transferred to the account of the company in April 2017. The details of which are as under:

The shares have been listed at BSE and NSE on 5th April 2017. Since the net proceeds from IPO had not been received as on 31st March 2017, the question of disclosure of utilization of proceeds does not arise.

b) Amount utilized for share issue expenses includes payment made for merchant banker fees, legal counsel fees, brokerage and selling commission, auditors fees, registrar to the issue, printing and stationary expenses, advertising and marketing expenses, statutory fees to regulator and stock exchanges and other incidental expenses towards Initial Public Offering (''IPO''). Of the total expenses relating to share issue, expenses aggregating to Rs, 2,69,84,539 have been adjusted against the Securities Premium Reserve and expenses aggregating to Rs, 17,98,91,777 have been recovered from the selling shareholders and is held in Escrow Account as at 31st March 2017. The recovery of expenses is in the proportion of shares offered for sale by the selling shareholders to total shares offered for IPO.

* Excludes of Rs, 68,20,000 (previous year Nil) towards fee and out of pocket expenses related to initial public offer of equity shares, included in IPO expenses which has been proportionately adjusted with the securities premium reserve as detailed in Note No.33."

5. The Company has neither any foreign currency earnings nor any foreign currency expenditure during the current period and previous year.

6. CIF Value of imports Nil (PY - Nil)

7. In accordance with para 4 of Accounting Standard-17- Segment Reporting, The company presents segment information only in the consolidated financial statements

8. Previous year figures have been regrouped wherever considered necessary.