Board of Directors Prakash C. Kanugo Chairman & Managing Director. Contents. Company Secretary & Compliance Officer Pallavi P.

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4 Prakash Steelage Ltd. Annual Report Board of Directors Prakash C. Kanugo Chairman & Managing Director Contents Ashok M. Se Whole-time Director & CFO Hemant P. Kanugo Whole-time Director Kamal P. Kanugo Whole-time Director Dr. Bipin C. Doshi Independent Director Himanshu J. Thaker Independent Director Gautam Chand Jain Independent Director A. Prakashchandra Hegde Independent Director 1. Notice Chairman's letter Directors' Report Annexure to Directors' report Management Discussion and Analysis Report Corporate Governance Report Independent Auditors' Report (Standalone) Annexure to Independent Auditors' Report 45 (Standalone) 9. Balance Sheet (Standalone) Profit & Loss (Standalone) Cash flow (Standalone) Notes to financial atements (Standalone) Independent Auditors' Report (Consolidated) Balance Sheet (Consolidated) Profit & Loss (Consolidated) Cash flow (Consolidated) Notes to financial atements (Consolidated) atement & Financial Information of Subsidiary Attendance Slip and Proxy 20. Financial highlights (la cover page back side) Company Secretary & Compliance Officer Pallavi P. Shedge Bankers Vijaya Bank Bank of Baroda Union Bank of India Bank of India DBS Bank Ltd. Statutory Auditors M/s. Khandelwal Jain & Co. Chartered Accountants M/s. D. C. Bora & Co. Chartered Accountants M/s. Batliboi & Purohit Chartered Accountants Internal Auditors M/s. Anand Jain & Associates Chartered Accountants Regiered Office 701, Mahalaxmi Chambers, Bhulabhai Desai Road, Mahalaxmi, Mumbai Tel.: Fax: inveorsgrievances@prakasheelage.com Website: CIN: L27106MH1991PLC Regirar & Transfer Agents Bigshare Services Private Limited E2/3, Ansa Indurial Eate, Saki Vihar Road, Sakinaka, Andheri (Ea), Mumbai Tel: / Fax: babu@bigshareonline.com Website: ISIN: E616K01016 Manufacturing Units Silvassa : Survey No. 46/1, Parjai Road, Village: Kherdi, Silvassa , Union Territory of Dadra & Nagar Haveli, (India) Umbergaon : Plot No.131/1, Umbergaon, Sanjan Road, Umbergaon , Di.Valsad, Gujarat (India) 01

5 Prakash Steelage Ltd. Annual Report Notice NOTICE is hereby given at e Twenty-Third Annual General Meeting of e Members of Prakash Steelage Limited will be held on Friday, 26 September, 2014 at 04:00 p.m. at Victoria Memorial School for e Blind, Opp. A.C. Market, Tardeo, Mumbai to transact e following business: Ordinary Business: 1. To receive, consider and adopt e andalone and e consolidated audited financial atements of e Company including e Balance Sheet as at, atement of Profit and Loss and e Cash flow atement for e year ended on at date along wi e notes to e financial atements and e reports of e Board of Directors and Auditors ereon. 2. To declare Dividend on e Equity Shares of e Company. 3. To appoint a Director in place of Mr. Kamal P. Kanugo (DIN: ), who retires by rotation at is Annual General Meeting and being eligible, offers himself for re-appointment. 4. To re-appoint and fix e remuneration of e Statutory Auditors M/s. Khandelwal Jain & Co. (Firm Regiration No W), and in is regard and if ought fit, to pass, wi or wiout modification(s) e following resolution as an Ordinary Resolution: RESOLVED THAT pursuant to e provisions of Section 139 and oer applicable provisions, if any, of e Companies Act, 2013 read wi e Companies (Audit & Auditors) Rules, 2014, M/s. Khandelwal Jain & Co., Chartered Accountants (Firm Regiration No W), be and are hereby re-appointed as Statutory Auditors of e Company, to hold office from e conclusion of is Annual General Meeting till e conclusion of e next Annual General Meeting of e Company at such remuneration as may be agreed to between e Board of Directors of e Company and e Auditors. 5. To appoint and fix e remuneration of e Statutory Auditors M/s. Batliboi & Purohit, Chartered Accountants (Firm Regiration No W), in place of M/s. D. C. Bora & Co., Chartered Accountants (Firm Regiration No W), as e Joint Statutory Auditors of e Company and in is regard and if ought fit, to pass, wi or wiout modification(s) e following resolution as an Ordinary Resolution: RESOLVED THAT pursuant to e provisions of Section 140 (4) and 139 and oer applicable provisions, if any, of e Companies Act, 2013 read wi e Companies (Audit & Auditors) Rules, 2014, M/s. Batliboi & Purohit, Chartered Accountants, (Firm Regiration No W), be and are hereby appointed as e Joint Statutory Auditors of e Company, consequent to e widrawal of consent seeking re-appointment by e exiing Joint Auditors, M/s. D. C. Bora & Co., Chartered Accountants (Firm Regiration No W), and e said firm M/s. Batliboi & Purohit, Chartered Accountants, shall hold office from e conclusion of is Annual General Meeting till e conclusion of e next Annual General Meeting of e Company at such remuneration plus out- of-pocket expenses as may be agreed to between e Board of Directors of e Company and e Auditors of e Company. Special Business: 6. To appoint Mr. A. Prakashchandra Hegde (DIN: ) as an Independent Director of e Company and to consider and, if ought fit, to pass wi or wiout modification(s), e following resolution as an Ordinary Resolution: RESOLVED THAT pursuant to provisions of Sections 149, 152, read wi Schedule IV, and oer 02

6 applicable provisions, if any, of e Companies Act, 2013 read wi e Companies (Appointment and Qualification of Directors) Rules, 2014 and Clause 49 of e Liing Agreement (Including any atutory modification(s) or re-enactment ereof for e time being in force), Mr. A. Prakashchandra Hegde (DIN: ), who was appointed as a Director liable to retire by rotation and in respect of whom e Company has received a notice in writing under Section 160 of e Companies Act, 2013 from a member proposing his candidature for e office of Director, be and is hereby appointed as an Independent Director of e Company for 5 (five) consecutive years, effective from 01 April, 2014 up to 31 March, 2019, wi e period of his office not liable to determination by retirement by rotation. RESOLVED FURTHER THAT e Board of Directors and / or e Company Secretary of e Company be and are hereby auorised to do all such acts, deeds matters, ings which are proper, necessary, expedient and incidental to give effect to e above resolution. 7. To appoint Dr. Bipin C. Doshi (DIN: ) as an Independent Director of e Company and to consider and, if ought fit, to pass wi or wiout modification(s), e following resolution as an Ordinary Resolution: RESOLVED THAT pursuant to provisions of Sections 149, 152, read wi Schedule IV, and oer applicable provisions, if any, of e Companies Act, 2013 read wi e Companies (Appointment and Qualification of Directors) Rules, 2014 and Clause 49 of e Liing Agreement (Including any atutory modification(s) or re-enactment ereof for e time being in force), Dr. Bipin C. Doshi (DIN: ), who was appointed as a Director liable to retire by rotation and in respect of whom e Company has received a notice in writing under Section 160 of e Companies Act, 2013 from a member proposing his candidature for e office of Director, be and is hereby appointed as an Independent Director of e Company for 5 (five) consecutive years, effective from 01 April, 2014 up to 31 March, 2019, wi e period of his office not liable to determination by retirement by rotation. RESOLVED FURTHER THAT e Board of Directors and / or e Company Secretary of e Company be and are hereby auorised to do all such acts, deeds matters, ings which are proper, necessary, expedient and incidental to give effect to e above resolution. 8. To appoint Mr. Gautam Chand C. Jain (DIN: ) as an Independent Director of e Company and to consider and, if ought fit, to pass wi or wiout modification(s), e following resolution as an Ordinary Resolution: RESOLVED THAT pursuant to provisions of Sections 149, 152, read wi Schedule IV, and oer applicable provisions, if any, of e Companies Act, 2013 read wi e Companies (Appointment and Qualification of Directors) Rules, 2014 and Clause 49 of e Liing Agreement (Including any atutory modification(s) or re-enactment ereof for e time being in force), Mr. Gautam Chand C. Jain (DIN: ), who was appointed as a Director liable to retire by rotation and in respect of whom e Company has received a notice in writing under Section 160 of e Companies Act, 2013 from a member proposing his candidature for e office of Director, be and is hereby appointed as an Independent Director of e Company for 5 (five) consecutive years, effective from 01 April, 2014 up to 31 March, 2019, wi e period of his office not liable to determination by retirement by rotation. RESOLVED FURTHER THAT e Board of Directors and / or e Company Secretary of e Company be and are hereby auorised to do all such acts, deeds matters, ings which are proper, necessary, expedient and incidental to give effect to e above resolution. 03

7 9. To appoint Mr. Himanshu J. Thaker (DIN: ) as an Independent Director of e Company and to consider and, if ought fit, to pass wi or wiout modification(s), e following resolution as an Ordinary Resolution: RESOLVED THAT pursuant to provisions of Sections 149, 152, read wi Schedule IV, and oer applicable provisions, if any, of e Companies Act, 2013, read wi e Companies (Appointment and Qualification of Directors) Rules, 2014, and Clause 49 of e Liing Agreement (Including any atutory modification(s) or re-enactment ereof for e time being in force), Mr. Himanshu J. Thaker (DIN: ), who was appointed as a Director liable to retire by rotation and in respect of whom e Company has received a notice in writing under Section 160 of e Companies Act, 2013, from a member proposing his candidature for e office of Director, be and is hereby appointed as an Independent Director of e Company for 5 (five) consecutive years, effective from 01 April, 2014 up to 31 March, 2019, wi e period of his office not liable to determination by retirement by rotation. RESOLVED FURTHER THAT e Board of Directors and / or e Company Secretary of e Company be and are hereby auorised to do all such acts, deeds matters, ings which are proper, necessary, expedient and incidental to give effect to e above resolution. 10. To ratify and confirm e remuneration to be paid to M/s. Amish Parmar & Associates, Co Accountants (revised Firm Regiration No (old regiration No ) for financial year and to consider and, if ought fit, to pass wi or wiout modification(s), e following resolution as an Ordinary Resolution: RESOLVED THAT pursuant to Section 148 of e Companies Act, 2013, read wi e Companies (Audit and Auditors) Rules, 2014, e remuneration of Rs. 95,000/- p.a. plus Service Tax and out-of pocket expenses for e financial year ending on 31 March, 2015 as approved by e Board of Directors of e Company to be paid to M/s. Amish Parmar & Associates, Co Accountants (revised Firm Regiration No (old regiration No ) for e conduct of co audit of e Company, be and is hereby ratified and confirmed. Regd. Office: 701, Mahalaxmi Chambers Bhulabhai Desai Road Mahalaxmi, Mumbai Place: Mumbai Date: 13 Augu, 2014 CIN: L27106MH1991PLC Tel.: Fax: Website: inveorsgrievances@prakasheelage.com On Behalf of e Board of Directors For Prakash Steelage Limited Sd/- Prakash C. Kanugo (Chairman & Managing Director) DIN :

8 Prakash Steelage Ltd. Annual Report Notes: 1. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE ANNUAL GENERAL MEETING IS ENTITLED TO APPOINT ONE OR MORE PROXIES TO ATTEND AND VOTE INSTEAD OF HIM AND SUCH PROXIES NEED NOT BE A MEMBER OF THE COMPANY. 2. As per Section 105(1) of e Companies Act, 2013, read wi Rule 19 of e Companies (Management and Adminiration) Rules, 2014, a person can act as proxy on behalf of Members not exceeding 50 (fifty) in number and holding in aggregate not more an 10 (ten) per cent of e total share capital of e Company carrying voting rights. In e case of a Member holding more an 10 (ten) per cent of e total share capital of e Company carrying voting rights, such a Member may appoint a single person as proxy, who however shall not act as proxy for any oer person or shareholder. 3. The inrument appointing e proxy, duly amped and executed mu be deposited at e Company's Regiered Office, not less an 48 hours before e commencement of e Annual General Meeting. 4. Corporate Members intending to send eir auorised representatives to attend e Meeting are requeed to send to e Company a certified copy of e Board Resolution, as per Section 113 of e Companies Act, 2013, auorising eir representative to attend and vote on eir behalf at e Meeting. 5. The Regier of Members of e Company and Share Transfer Books shall remain closed from, Saturday, 13 September, 2014 to Friday, 26 September, 2014 (bo days inclusive) for determining e names of members eligible for dividend on Equity Shares, if declared. 6. An Explanatory Statement pursuant to Section 102 of e Companies Act, 2013, relating to e Special Business under Item No 5,6,7,8 and 9 above to be transacted at e Meeting is annexed hereto. 7. The dividend, if declared, will be paid on or before 25 October, The dividend, if declared at e meeting, shall be paid wiin e ipulated period, to ose members of e Company whose names appear on e Regier of Members of e Company as on 12 September, In respect of shares held in Electronic form, e dividend will be paid to e beneficial owners as per details furnished by National Securities Depository Limited and Central Depository Services (India) Limited as beneficial owners as on at date. 9. Members are requeed to notify immediately any change in eir address / Bank mandate to eir respective Depository Participants (DPs) in respect of eir electronic share accounts and in respect of eir physical shares Folios to e Regirars and Share Transfer Agent of e Company, M/s. Bigshare Services Private Limited, E2/3, Ansa Indurial Eate, Saki Vihar Road, Sakinaka, Andheri (Ea), Mumbai Members are requeed to quote eir Ledger Folio Number / Client ID Number in all eir future correspondence. 11. Members/Proxy holders are requeed to bring eir copies of e Annual Report to e Annual General Meeting of e Company. 12. In case of joint holders attending e Meeting, only such joint holder who is higher in e order of names will be entitled to vote. 13. Section 72 of e Companies Act, 2013, read wi Rule 19(1) of e Rules made ereunder, permits 05

9 Nomination by e members of e Company in e prescribed Form SH-13. Members are requeed to avail is facility. 14. Electronic copy of e Notice along wi e Annual Report is being sent to all e members whose IDs are regiered wi e Company/Depository Participant(s) for communication purposes unless any member has requeed for a hard copy of e same. For members who have not regiered eir address, physical copies of e Annual Report are being sent in e permitted mode. 15. Non-Resident Indian Members are requeed to inform M/s. Bigshare Services Private Limited, immediately of: a. Change in eir residential atus on return to India for permanent settlement. b. Particulars of eir bank account maintained in India wi complete name, branch, account type, account no. and address of e Bank wi PIN Code No, if not furnished earlier. 16. The Members/proxies should bring e attendance slip duly filled in and signed for attending e meeting. 17. All documents referred to in e Notice will be available for inspection by e shareholders at e Regiered Office of e Company between 10:00 a.m. and 1:00 p.m. on all working days from e date hereof up to e date of e AGM. 18. The Regiers required to be maintained under e Companies Act, 2013, including e Regier of Directors' Shareholding, maintained by e Company under Section 307 of e Companies Act, 1956, and e Regier of Directors and Key Managerial Personnel and eir Shareholding in e Company under Section 170 of e Companies Act, 2013, and e Regier of Contracts maintained by e Company under Section 301 of e Companies Act, 1956, and under Section 189 of e Companies Act, 2013, will be available for inspection by e Members at e AGM. 19. Members desiring any information as regards e Accounts are requeed to write to e Company atlea 10 days before e Annual General Meeting, so as to enable e Management to keep e information ready at e meeting. 20. Members who wish to claim dividends, which remain unclaimed, are requeed to correspond wi Regirar and Share Transfer Agent, M/s. Bigshare Services Private Limited, at eir Address. Members are requeed to note at dividends not encashed or claimed wiin seven years from e date of transfer to e Company's Unpaid Dividend Account, will, as per Section 205C of e Companies Act, 1956, be transferred to e Inveors Education and Protection Fund. The details of e un-encashed /unclaimed above-mentioned Dividend are as under: Dividend for e Financial Year Unclaimed / Un-encashed Dividend as on (Amount ) Due date of transfer to Inveor Education and Protection Fund ,734/- 18 September, ,111/- 20 September, ,478/- 20 September, Amount in Company's Refund Account as on is Rs.59,400/- as balance yet to be refunded to e applicants/allottees as ey are yet to submit necessary confirmation. As on 31 March, 2014 no shares are lying in Unclaimed Shares Demat Suspense Account. 22. Information required to be furnished under Clause 49 IV(G) of e Liing Agreement about e Directors seeking appointment / re-appointment is given in e Corporate Governance Report which forms part of is Annual Report. 06

10 Prakash Steelage Ltd. Annual Report In compliance wi e provisions of Section 108 of e Act and e Rules framed ereunder, e Members are provided wi e facility to ca eir vote electronically, rough e e-voting services provided by Central Depository Services (India) Limited (CDSL), on all resolutions set for in is Notice. The inructions for e-voting are as under: A) In case of members receiving (i) (ii) (iii) (iv) Log on to e e-voting website Click on Shareholders tab to ca your votes. Now, select e Electronic Voting Sequence Number - EVSN along wi Prakash Steelage Limited from e drop down menu and click on SUBMIT If you are holding shares in Demat form and have already voted earlier on for a voting of any Company, en your exiing login id and password are to be used. If you are a fir time user follow e eps given below. User ID PAN* DOB# (v) Dividend Bank Details# Now, fill up e following details in e appropriate boxes: For Members holding shares in Demat Form For NSDL: 8 Character DP ID followed by 8 Digits Client IDFor CDSL: 16 digits beneficiary ID For Members holding shares in Physical Form Folio Number regiered wi e Company Enter your 10 digit alpha-numeric *PAN issued by Income Tax Department when prompted by e syem while e-voting (applicable for bo demat shareholders as well as physical shareholders) Enter e Date of Bir as recorded in your demat account or in e company records for e said demat account or folio in dd/mm/yyyy format. Enter e Dividend Bank Details as recorded in your demat account or in e company records for e said demat account or folio. *Members who have not updated eir PAN wi e Company/Depository Participant are requeed to use e default number: <ABCDE1234F> in e PAN field. # Please enter any one of e details in order to login. Incase eier of e details are not recorded wi e depository/company, please enter e number of shares held by you as on 12 September, 2014 in e Dividend Bank details field. (vi) (vii) After entering ese details appropriately, click on SUBMIT tab. Members holding shares in physical form will en reach directly e EVSN selection screen. However, members holding shares in demat form will now reach 'Password Creation' menu wherein ey are required to mandatorily enter eir login password in e new password field. Kindly note at is password is to be also used by e demat holders for voting for resolutions of any oer company on which ey are eligible to vote, provided at company opts for e-voting rough CDSL platform. It is rongly recommended not to share your password wi any oer person and take utmo care to keep your password confidential. (viii) For members holdings shares in physical form, e details can be used only for e-voting on e resolutions contained in is Notice. (ix) Click on e relevant EVSN on which you choose to vote. 07

11 (x) (xi) (xii) (xiii) (xiv) (xv) (xvi) On e voting page, you will see Resolution Description and again e same e option YES/NO for voting. Select e option YES or NO as desired. The option YES implies at you assent to e Resolution and option NO implies at you dissent to e Resolution. Click on e Resolutions File Link if you wish to view e entire Resolutions. After selecting e resolution you have decided to vote on, click on SUBMIT. A confirmation box will be displayed. If you wish to confirm your vote, click on OK, else to change your vote, click on CANCEL and accordingly modify your vote. Once you CONFIRM your vote on e resolution, you will not be allowed to modify your vote. You can also take out print of e voting done by you by clicking on Click here to print option on e Voting page. If Demat account holder has forgotten e changed password en Enter e User ID and Captcha Code click on Forgot Password & enter e details as prompted by e syem. Initutional shareholders (i.e. oer an individuals, HUF, NRI etc.) are required to log on to and regier emselves, link eir account which ey wish to vote on and en ca eir vote. They should upload a scanned copy of e Board Resolution and POA in favour of e Cuodian who ey have auorised to vote on eir behalf, in PDF format in e syem for e scrutinizer to verify e vote. B) In case of members receiving e physical copy of Notice of AGM [for members whose IDs are not regiered wi e company/ depository participant(s) or requeing physical copy]: Please follow all eps from sl. no. (i) to sl. no. (xvi) above, to ca vote. C) The voting period begins on 18 September, 2014 (9.00 am) and ends on 20 September, 2014 (6.00 pm) During is period shareholders of e Company, holding shares eier in physical form or in dematerialized form, as on e cut-off date 12 September, 2014, may ca eir vote electronically. The e-voting module shall be disabled by CDSL for voting ereafter. Once e vote on a resolution is ca by e shareholder, e shareholder shall not be allowed to change it subsequently. D) In case you have any queries or issues regarding e-voting, you may refer e Frequently Asked Queions ( FAQs ) and e-voting manual available at under help section or write an to helpdesk.evoting@cdslindia.com. a. Mr. S. Anana Rama Subramanian, FCS, Practicing Company Secretary (CP No.1925), proprietor of M/s. S. Anana & Co., has been appointed as Scrutiniser to scrutinise voting process in a fair and transparent manner. b. The Scrutinizer shall wiin a period not exceeding 3 (ree) working days from e conclusion of e e-voting period unblock e votes in e presence of at lea 2 (two) witnesses not in e employment of e Company and make a Scrutinizer's Report of e votes ca in favour or again, if any, forwi to e Chairman of e Company. The Results shall be declared on or after e AGM of e Company. The Results declared along wi e Scrutinizer's Report shall be available for inspection and also placed on e website of e Company wiin prescribed period. 08

12 Prakash Steelage Ltd. Annual Report Annexure to e Notice Explanatory Statement pursuant to Section 102 of e Companies Act, 2013: Item No. 5: The Exiing Statutory Auditors of e Company are M/s. D. C. Bora & Co., Chartered Accountants (Firm Regiration No W) and M/s. Khandelwal Jain & Co., Chartered Accountants (Firm Regiration No W), holding e office jointly upto e ensuing Annual General Meeting of e Company. However, M/s. D. C. Bora & Co., Chartered Accountants (Firm Regiration No W), have widrawn eir consent for re-appointment as e Joint Statutory Auditors at e ensuing Annual General Meeting of e Company. Pursuant to Section 115 of e Companies Act, 2013, read wi Rule 23 of e Companies (Management and Adminiration) Rules, 2014, e Company has received a Special Notice in terms of sub-section (4) of Section 140 of e Companies Act, 2013, from a member on 13 Augu, 2014, proposing to pass a resolution for appointment of M/s. Batliboi & Purohit, Chartered Accountants (Firm Regiration No W), as e Joint Statutory Auditors in place of M/s. D. C. Bora & Co., Chartered Accountants (Firm Regiration No W), who have widrawn eir consent to be appointed as e Joint Statutory Auditors at e ensuing Annual General Meeting of e Company. As per e Companies Act, 2013, M/s. Batliboi & Purohit, Chartered Accountants have confirmed at e appointment, if made, would be wiin e limits specified under Section 141(3)(g) of e Act at ey are not disqualified to be appointed as e atutory auditors in terms of e proviso to Section 139(1), Section 141(2) and Section 141(3) of e Act. Their appointment has been proposed from e conclusion of is Meeting until e conclusion of next Annual General Meeting, subject to e approval of e members. Copy of all e documents mentioned herein above, would be available for inspection by e shareholders at e Regiered Office of e Company between 10:00 a.m. and 1:00 p.m. on all working days from e date hereof up to e date of e AGM. None of e Directors and Key Managerial Personnel of e Company and eir relatives are concerned or intereed, financially or oerwise, in e said resolution. Item No. 6: Mr. A. Prakashchandra Hegde, exiing Director on e Board of e Company is a Non-Executive Independent Director pursuant to Clause 49 of e Liing Agreement wi effect from 28 May, 2012 and his period of office was liable to determination by retirement of Directors by rotation under e erwhile Companies Act, Section 149 of e Companies Act, 2013, which came into effect from 01 April, 2014 requires every Lied Company to have at lea one ird of e total number of Directors on e Board as Independent Directors. Mr. A. Prakashchandra Hegde, being eligible and offering himself for appointment, is proposed to be appointed as an Independent Director on e Board of Directors of e Company for a consecutive period of 5 (five) years upto 31 March, 2019, wi e period of his office not liable to determination by retirement by rotation. A notice has been received from a member, alongwi e required deposit, proposing Mr. A. Prakashchandra Hegde as a candidate for e office of Director of e Company, in terms of Section 160 of e Companies Act, Mr. A. Prakashchandra Hegde has submitted e declaration of independence, as required pursuant to Section 149(7) of e Companies Act, 2013, ating at he meets e criteria of independence as provided in sub-section (6). Furer, he is not disqualified from being appointed as a director in terms of section 164 of e Act. The Board of Directors of e Company is of e opinion at Mr. A. Prakashchandra Hegde, is a person of integrity and fulfils e conditions specified in e Act, for such an appointment and possess requisite experience and knowledge, which is relevant to e business of e Company and his continued association would be of immense benefit to e Company. The Board of Directors of your Company, hence recommends e resolution as set out under Item No. 5, in relation to appointment of Mr. A. Prakashchandra Hegde as an Independent Director, for e approval of e shareholders of e Company, to be passed as an Ordinary Resolution. 09

13 Except Mr. A. Prakashchandra Hegde, none of e Directors and Key Managerial Personnel of e Company and eir relatives are concerned or intereed, financially or oerwise, in e said resolution. Copy of all e documents mentioned herein above, along wi e letter of appointment of Mr. A. Prakashchandra Hegde as an Independent Director setting out e terms and conditions, would be available for inspection by e shareholders at e Regiered Office of e Company between 10:00 a.m. and 1:00 p.m. on all working days from e date hereof up to e date of e AGM. Information / disclosure required to be furnished under Clause 49 IV (G) of e Liing Agreement about Mr. A. Prakashchandra Hegde is given in e Corporate Governance Report which forms part of is Annual Report. Item No. 7 : Dr. Bipin C. Doshi, exiing Director on e Board of e Company is a Non-Executive Independent Director pursuant to Clause 49 of e Liing Agreement wi effect from 25 Augu, 2008 and his period of office was liable to determination by retirement of Directors by rotation under e erwhile Companies Act, Section 149 of e Companies Act, 2013, which came into effect from 01 April, 2014 requires every Lied Company to have at lea one ird of e total number of Directors on e Board as Independent Directors. Dr. Bipin C. Doshi, being eligible and offering himself for appointment, is proposed to be appointed as an Independent Director on e Board of Directors of e Company for a consecutive period of 5 (five) years upto 31 March, 2019, wi e period of his office not liable to determination by retirement by rotation. A notice has been received from a member, alongwi e required deposit, proposing Dr. Bipin C. Doshi as a candidate for e office of Director of e Company, in terms of Section 160 of e Companies Act, Dr. Bipin C. Doshi has submitted e declaration of independence, as required pursuant to Section 149(7) of e Companies Act, 2013, ating at he meets e criteria of independence as provided in sub-section (6). Furer, he is not disqualified from being appointed as a director in terms of section 164 of e Act. The Board of Directors of e Company is of e opinion at Dr. Bipin C. Doshi, is a person of integrity and fulfils e conditions specified in e Act, for such an appointment and possess requisite experience and knowledge, which is relevant to e business of e Company and his continued association would be of immense benefit to e Company. The Board of Directors of your Company, hence recommends e resolution as set out under Item No. 6, in relation to appointment of Dr. Bipin C. Doshi as an Independent Director, for e approval of e shareholders of e Company, to be passed as an Ordinary Resolution. Except Dr. Bipin C. Doshi, none of e Directors and Key Managerial Personnel of e Company and eir relatives are concerned or intereed, financially or oerwise, in e said resolution. Copy of all e documents mentioned herein above, along wi e letter of appointment of Dr. Bipin C. Doshi as an Independent Director setting out e terms and conditions, would be available for inspection by e shareholders at e Regiered Office of e Company between 10:00 a.m. and 1:00 p.m. on all working days from e date hereof up to e date of e AGM. Information / disclosure required to be furnished under Clause 49 IV(G) of e Liing Agreement about Dr. Bipin C. Doshi is given in e Corporate Governance Report which forms part of is Annual Report. Item No. 8 : Mr. Gautam Chand C. Jain, exiing Director on e Board of e Company is a Non-Executive Independent nd Director pursuant to Clause 49 of e Liing Agreement wi effect from 02 September, 2009 and his period of office was liable to determination by retirement of Directors by rotation under e erwhile Companies Act, Section 149 of e Companies Act, 2013, which came into effect from 01 April, 2014 requires every Lied Company to have at lea one ird of e total number of Directors on e Board as Independent Directors. Mr. Gautam Chand C. Jain, being eligible and offering himself for appointment, is proposed to be appointed as an Independent Director on e Board of Directors of e Company for a consecutive period of 5 (five) years upto 31 March, 2019, wi e period of his office not liable to determination by retirement by rotation. A notice has been received from a member, alongwi e required deposit, proposing Mr. Gautam Chand C. Jain as a candidate for e office of Director of e Company, in terms of Section 160 of e Companies Act,

14

15 Item No. 10: In pursuance of Section 148 of e Companies Act, 2013, read wi e Companies (Audit and Auditors) Rules, 2014, e Board shall appoint an Individual, who is co accountant in practice on e recommendations of e Audit Committee, which shall also recommend remuneration for such auditor. The remuneration recommended by Audit Committee shall be considered and approved by e Board of Directors and ratified by e shareholders, as per Rule 14 of e Companies (Audit and Auditors) Rules, On e recommendations of e Audit Committee at its meeting held on 29 May, 2014, e Board has considered and approved e appointment of M/s. Amish Parmar & Associates, Co Accountants (revised Firm Regiration No (old regiration No )), as e Co Auditors of e Company to conduct audit of co accounting records maintained by e Company for e year ending on 31 March, The Board of Directors of your Company, hence recommends e resolution as set out under Item No. 9, in relation to ratification and confirmation of e remuneration to be paid to M/s. Amish Parmar & Associates, Co Accountants for financial year , for e approval of e shareholders of e Company, to be passed as an Ordinary Resolution. Copy of all e documents mentioned herein above, would be available for inspection by e shareholders at e Regiered Office of e Company between 10:00 a.m. and 1:00 p.m. on all working days from e date hereof up to e date of e AGM. None of e Directors and Key Managerial Personnel of e Company and eir relatives are concerned or intereed, financially or oerwise, in e said resolution. Regd. Office: 701, Mahalaxmi Chambers Bhulabhai Desai Road Mahalaxmi, Mumbai Place: Mumbai Date: 13 Augu, 2014 CIN: L27106MH1991PLC Tel.: Fax: Website: inveorsgrievances@prakasheelage.com On Behalf of e Board of Directors For Prakash Steelage Limited Sd/- Prakash C. Kanugo (Chairman & Managing Director) DIN :

16 Chairman's Letter To The Shareholders Dear Members, rd I extend a hearty Welcome to you all on behalf of e Board of Directors, to is 23 Annual General Meeting of e Company. It gives me great pleasure to share wi you e highlights of anoer grow filled and successful year. Despite challenging business conditions, environment and economy, our Company could improve e performance. It's a eely determination to grow again all odds, which ensured a successful year. Company's Performance Steel production in India recorded a grow rate of 4.8 per cent in February, 2014 over February, The cumulative grow during April February, ood at 4.2 per cent. Wi e positively changes happening on account of e focus for DEVELOPMENT, e Company's performance is expected to grow furer in e coming years along wi e grow ory of INDIA in all spheres of life especially wi ru in e core sectors like Steel, Cement, capital goods etc. On e operational front, e Company has made significant progress in e la year. Your Company has taken various initiatives to enhance production processes by improving operational discipline and minimizing equipment downtime. This has led to a significant improvement in operating parameters. The Company, on andalone basis, has recorded n et revenue of Rs. 94, Lacs, as compared to Rs.79, Lacs in e previous year reflecting a grow of 19.04%.The profit before tax is Rs. 2, Lacs as aga 2, Lacs in e previous year reflecting a increase in Profit by Rs Lacs. an increase of 22.97%. The Net Profit after Tax is Rs.1, Lacs as aga 1, Lacs in e previous year reflecting an increase of profit by Rs Lacs, an increase of 17.98%.The Earning per Share (EPS) ood at Rs.9.46 per share. On dividend front your Board ought it fit to maintain e rate of dividend at Re per share. Furer it is my pleasure to bring to your kind attention two major developments took place is year viz. a) The Company has set up 'Pioneer Stainless & Alloy F.Z.C.', a Wholly Owned Foreign Subsidiary in UAE, to venture in e import and export of eel and eel products in e Gulf region and in e fir year of operations itself e said Company has achieved a turnover of Rs Lacs wi a Net profit of Rs lacs. b) Considering e potential of grow in Real eate, e Company has decided to enter into conruction business by forming rategic alliance wi Kargwal Developers Private Limited (Co-promoter Omkar Group) for development of its idle land at Palgam, Umbergaon, Gujarat, in e be business interes of e Company, which will rengen e Company's Performance in years to come. Now wi e rong New Governmentt in place at Centre, ings are expected to improve fa Your management team is also working very hard to ensure timely delivery, better quality, competitive pricing to improve all round grow at will enhance market positioning and generate better returns for its shareholders and improved valuation to its all akeholders. The Company rives to earn a pre eminent position in manufacturing high grade ainless eel products in India. The Company has continued in providing value for our cuomers, having culture of inclusive grow, remaining as environment friendly Steel Company. Our Vision and commitment to create enduring value will continue to inspire us as we rive to achieve even greater success in e future. Acknowledgement I would like to express my sincere appreciation to our shareholders for e support and confidence reposed in us, and all oer akeholders and Government agencies, our Bankers for e continuing commitment and support in your Company. We look forward for eir continued association wi e Company. Sd/- Prakash C. Kanugo (Chairman & Managing Director) DIN :

17 Directors Report To The Members of Prakash Steelage Limited rd Your Directors take pleasure in presenting e 23 Annual Report of your Company, togeer wi e Audited Annual Accounts for e financial year ended. Financial Highlights The financial performance of e Company, for e year ended is summarized below: Particulars Year Ended (Rs. in Lacs) Year Ended Income from Operations 94, , Profit before Depreciation and Tax 3, , Depreciation Profit Before Tax 2, , Taxation Profit After Tax 1, , Balance brought forward 5, , Amount available for Appropriation 7, , Proposed Dividend & Tax on Dividend Transfer to General Reserve Balance Transferred to Balance Sheet 6, , Financial Performance The income from operations for e year has increased to Rs.94, Lacs as compared to Rs.79, Lacs of previous year reflecting a grow of 19.04%. The Profit Before Tax for e year was Rs. 2, Lacs as aga 2, Lacs in e previous year reflecting an increase of Profit by 22.97%. The Net Profit After Tax also increased by 17.98% at Rs. 1, Lacs as compared to Rs. 1, Lacs during previous year. Consolidated Accounts The Consolidated Financial Statements of your Company for e financial year are prepared in compliance wi applicable Accounting Standards and applicable clauses of e Liing Agreement as prescribed by e Securities and Exchange Board of India. The consolidated accounts have been prepared on e basis of audited financial atements received from wholly-owned foreign subsidiary of e Company. A separate atement containing e salient financial information of e wholly-owned foreign subsidiary of e Company which includes capital, reserves, total assets, total liabilities, details of invement, turnover etc. along wi e atement under Section 212 of e Companies Act, 1956, forms part of is report in compliance wi e General Circular No 2/2011 dated 08 February, 2011 issued by Miniry of Corporate Affairs granting a general exemption from e provisions of Section 212(8) of e Companies Act, The annual accounts and financial atements of e wholly-owned foreign subsidiary and related detailed information shall be made available to members on reque and are open for inspection at e Regiered Office of your Company during e office hours between 11:00 a.m. to 1:00 p.m. Wholly-Owned Foreign Subsidiary The Company has incorporated its Wholly-Owned Foreign Subsidiary at U.A.E. in e name of Pioneer Stainless & Alloy, F.Z.C., wi an object of trading rough import and export of eel and basic eel products. The details of e Wholly-owned Foreign Subsidiary and its business operations during e year under review are covered in e Management Discussion and Analysis Report. 14

18 Prakash Steelage Ltd. Annual Report In e completion of fir year e Company's total turnover has ood at Rs. 81,22,17,323/- (US$ 1,34,25,923) and has gained a satisfactory profit of Rs. 4,85,29,265/- (US$ 802,187) as per its audited financial results. Dividend The Board has, subject to e approval of members at e ensuing Annual General Meeting, recommended a dividend of Re.1/- (Previous Year Re. 1/-) per Equity Share on e 1,75,00,039 fully paid-up Equity Shares of Rs.10/- each, for e financial year ended, amounting to Rs.1,75,00,039/- and tax ereon of Rs. 29,74,132/-. The Dividend will be paid to members whose names appear in e Regier of Members as on 12 September, 2014, in respect of shares held in dematerialized form, it will be paid to members whose names are furnished by National Securities Depository Limited and Central Depository Services (India) Limited, as beneficial owners as on at date. Transfer to General Reserve The Company proposes to transfer Rs Lacs (Previous year Rs Lacs) to e General Reserve and an amount of Rs. 6, Lacs (Previous year Rs. 5, Lacs) to be carried to balance sheet out of e balance amount available for appropriation. Credit Rating CRISIL has reaffirmed its rating, 'CRISIL BBB/A3+' wi change in e outlook to Stable. The ratings reflect e improved Company's financial risk profile, marked by moderate net wor, and healy gearing, and its eablished market position in e ainless-eel pipes and tubes indury. These rating rengs are partially offset by e Company s working-capital-intensive operations and susceptibility of its profitability to volatility in prices of inputs and in foreign exchange rates. Fixed Deposit The Company has not accepted any Fixed Deposit from public and is erefore not required to furnish information in respect of outanding deposit under Non-Banking Non Financial Companies (Reserve Bank) Directions, 1966, and The Companies (Acceptance of Deposits) Rules, 1975, as amended. Directors In accordance wi e provisions of e Companies Act, 2013, no Independent Director is liable to retire by rotation. Only e Executive Directors are liable to retire by rotation. In view of is new provisions and in terms of Article 150 of Articles of Association of e Company, Mr. Kamal P. Kanugo, Director of e Company, is liable to retire by rotation at e ensuing Annual General Meeting and being eligible, have offered himself for reappointment. Your Directors recommend his re-appointment. Furer, your Board of Directors is seeking e appointment of all e exiing Independent Directors, viz. Mr. A. Prakashchandra Hegde, Dr. Bipin C. Doshi, Mr. Gautam Chand C. Jain, and Mr. Himanshu J. Thaker as Independent Directors of e Company in terms of Section 149 of e Companies Act, 2013, for a period of 5 (five) years wi effect from 01 April, 2014 up to 31 March, 2019, wi eir period of office not liable to be determined by retirement of Directors by rotation. The Company has received notices from members under Section 160 of e Companies Act, 2013, along wi required deposits proposing e appointment of Mr. A. Prakashchandra Hegde, Dr. Bipin C. Doshi, Mr. Gautam Chand C. Jain, and Mr. Himanshu J. Thaker, as Independent Directors of e Company at is Annual General Meeting. The Company has also received e requisite disclosures/declarations from said directors as required under Section 149 and oer applicable provisions of e Companies Act, 2013, and Rules made ereunder. Appropriate resolutions seeking your approval for e appointment of Mr. A. Prakashchandra Hegde, Mr. Gautam Chand C. Jain, Dr. Bipin C. Doshi and Mr. Himanshu J. Thaker as Independent Directors of e Company, has already been included in e notice of e Annual General Meeting. None of e Directors are related to each oer per se. 15

19 Your Directors recommend e above-mentioned appointments. The particulars and brief resume of Directors to be re-appointed / appointed are included in e Corporate Governance Report forming part of is Annual Report. Directors' Responsibility Statement In accordance wi Section 217(2AA) of e Companies Act, 1956, your Board of Directors confirms at: (i) in e preparation of e annual accounts of e company, e applicable accounting andards have been followed, along wi proper explanation relating to material departures; and at ere are no material departures from prescribed accounting andards in e adoption of ese andards; (ii) ey have selected such accounting policies and applied em consiently and made judgments and eimates at are reasonable and prudent so as to give a true and fair view of e ate of affairs of e Company at e end of e financial year and of e profit of e Company for at year; (iii) ey have taken sufficient care to maintain adequate accounting records in accordance wi e provisions of e Companies Act, 1956 (to e extent applicable), e provisions of e Companies Act, 2013 (to e extent notified) for safeguarding e assets of e Company and for preventing and detecting fraud and oer irregularities; and (iv) ey have prepared e annual accounts of e Company on a 'going concern' basis. Whole-time Key Managerial Personnel (KMP) In accordance wi Section 203 of e Companies Act, 2013, every Lied Company is required to have certain officers of e Company as Whole-time KMP. Your Board of Directors has taken note of e exiing office of e following personnel as Whole-time KMP of e Company: 1. Mr. Prakash C. Kanugo, Managing Director 2. Mr. Ashok M. Se, Whole-Time Director (Finance) as CFO 3. Ms. Pallavi P. Shedge, Company Secretary Auditors The Exiing Statutory Auditors of e Company are M/s. D. C. Bora & Co., Chartered Accountants (Firm Regiration No W) and M/s. Khandelwal Jain & Co., Chartered Accountants (Firm Regiration No W), holding e office jointly upto e ensuing Annual General Meeting of e Company. However, M/s. D. C. Bora & Co., Chartered Accountants (Firm Regiration No W) have widrawn eir consent for re-appointment, as e Joint Statutory Auditors at e ensuing Annual General Meeting of e Company. Pursuant to Section 115 of e Companies Act, 2013, read wi Rule 23 of e Companies (Management and Adminiration) Rules, 2014, e Company has received a Special Notice in terms of sub-section (4) of Section 140 of e Companies Act, 2013, from a member on 13 Augu, 2014, proposing to pass a resolution for appointment of M/s. Batliboi & Purohit, Chartered Accountants, (Firm Regiration No W) as e Joint Statutory Auditors in place of M/s. D. C. Bora & Co., Chartered Accountants (Firm Regiration No W). As required under e provisions of Section 139(1) and as per e criteria specified under Section 141(3)(g) of e Companies Act, 2013, and as per e Companies (Audit and Auditors) Rules, 2014, e Company has received a written certificate from e above Auditors, proposed to be re-appointed, to e effect at eir reappointment, if made, would be in conformity wi e limits specified in e said section and at ey are not disqualified for re-appointment wiin e meaning of Section 139(2) of e Companies Act, 2013, and Rule 6 of e Companies (Audit and Auditors) Rules, Co Auditor As per Section 148 read wi Companies (Audit and Auditors) Rules, 2014, and oer applicable provisions, if any, of e Companies Act, 2013, e Board of Directors of your Company has appointed M/s. Amish Parmar & Associates, Co Accountants, as e Co Auditor of your Company for e financial year on e recommendations made by e Audit Committee. The remuneration proposed to be paid to e Co Auditors, subject to e ratification by e members at e ensuing Annual General Meeting, would be Rs. 95,000/- plus Service Tax and out of pocket expenses, if any. Necessary resolution seeking your ratification for e proposed remuneration to be paid to e Co Auditor has already been included in e notice of e Annual General Meeting. 16

20 Prakash Steelage Ltd. Annual Report The Co Audit Report for e year ended in XBRL format has been filed on 27 September, 2013, which was wiin due date of 27 September, Internal Control Syems Your Company has an effective internal control and risk mitigation syem, which is conantly assessed and rengened wi new / revised andard operating procedures. The Company has entrued e internal audit to M/s. Anand Jain & Associates, Chartered Accountants. The initial object of e internal audit process is te and review of controls, independent appraisal of risks, business process and benchmarking internal controls wi be practices. The Audit Committee of e Board of Directors actively reviews, e adequacy and effectiveness of e internal control syems and sugges improvements to rengen em. The Company has a robu Management Information Syem, which is an integral part of e control mechanism. The Audit Committee of e Board of Directors and Statutory Auditors are periodically apprised of e Internal Audit findings and corrective action taken. Internal audit plays a key role in providing assurance to e Board of Directors. Risk Management The Company is exposed to risks from market fluctuations of foreign exchange, intere rates, commodity price risks, business risks and compliance risks. Foreign Exchange Risk The Company's hedging policy is designed to actively manage its foreign exchange risk wiin e framework decided wi due discussion and ratified by e management (Board) and also to minimize e impact of volatility in foreign exchange fluctuations on e earnings and outgo. Intere Rate Risk By considering e continuous fluctuations in e intere rate, e Company has adopted a prudent risk mitigation rategy to reamline e intere rate. Commodity Price Risk As again major big orders, e general practice followed by e Company is to book its raw material sourcing before confirming e order to e cuomer, which helps mitigate rain on operating margins. Corporate Social Responsibility During e year, your Directors have conituted e Corporate Social Responsibility Committee comprising Dr. Bipin C. Doshi as e Chairman and Mr. Ashok M. Se and Mr. Hemant P. Kanugo as oer Members of e committee. The said Committee has been entrued wi e responsibility of formulating and recommending to e Board, a Corporate Social Responsibility Policy (CSR Policy) dealing wi e activities to be undertaken by e Company, monitoring e implementation of e framework of e CSR Policy and recommending e amount to be spent on CSR activities. Vigil Mechanism under While Blower Policy Under e provisions of Section 177(9) of e Companies Act, 2013, your Company has eablished a Vigil Mechanism under While Blower Policy for e Directors and employees of e Company to avoid e inances of uneical behaviour, actual or suspected, fraud or violation of e Company's code of conduct. Such Vigil Mechanism shall provide for adequate safeguards again victimisation of persons who use such mechanism and also make provision for direct access to e Chairman of e Audit Committee in appropriate or exceptional cases. Under Vigil Mechanism e Chairman of Audit Committee of e Company is auorised for direct access in exceptional cases. Furer e Company Secretary of e Company has been appointed as Vigilance Officer of e Company under Vigil Mechanism adopted by e Company. 17

21 Nomination and Remuneration Committee In Compliance wi e provisions of Companies act, 2013, your Company re-aligned its exiing Remuneration Committee as Nomination and Remuneration Committee wi enhanced scope and functions as ipulated under e new law. The Nomination and Remuneration Committee of e Company comprises of Mr. Himanshu J. Thaker as Chairman of e Committee, Dr. Bipin C. Doshi and Mr. A. Prakashchandra Hegde as members of e Committee. Stakeholders' Relationship Committee Your Company re-aligned its exiing 'Inveors Grievance Committee' as 'Stakeholders' Relationship Committee', wi an enhanced scope and functioning. The akeholders Relationship Comprises of Dr. Bipin C. Doshi as Chairman of e Committee and Mr. Himanshu J. Thaker and Mr. Ashok M. She as Members of e Committee. Particulars Regarding Conservation of Energy, Technology Absorption, Foreign Exchange Earning and Outgo Details of energy conservation and research and development activities undertaken by e Company along wi e information in accordance wi e provisions of Section 217(1)(e) of e Companies Act, 1956, read wi e Companies (Disclosure of Particulars in e Report of Board of Directors) Rules, 1988, are given in e Annexure to e Directors' Report. Management Discussion and Analysis Management Discussion and Analysis Report for e year under review, as ipulated under Clause 49 of e Liing Agreement wi e Stock Exchanges in India on corporate governance, is presented in a separate section of is Annual Report. Development of Indurial Park During e year e Company has entered into conruction business by forming rategic alliance wi Kargwal Developers Private Limited (Co-promoter Omkar Group) for development of an Indurial Park in e name of Krishna Indurial Park on its idle land located at Palgam, Umbergaon, Gujarat where it has introduced world class indurial plots for sale, useful to factories, warehouses, workshops and service ations etc. Corporate Governance Your Company has complied wi e requirements of Clause 49 of e Liing Agreements wi e Stock Exchanges. We have conituted our internal policies on Corporate Governance. During e year Vigil Mechanism under While Blower Policy and Code of Conduct have been incorporated in e policy. A report on Corporate Governance practices, e Company Secretary Certificate on compliance of e mandatory requirement ereon are given under e Corporate Governance Report forming part of is Annual Report. Particulars of Employees Particulars of employees as required under e provisions of Section 217(2A) of e Companies Act, 1956, read wi e Companies (Particulars of Employees) Rules, 1975 as amended to date are not applicable to e Company as ere are no employees in receipt of e prescribed remuneration. Human Resources Your Company enjoys cordial relations wi its employees. The HR department has been playing a key role in e journey of e Company. The key focus of your Company is to attract, retain and develop talent of its employees as Human Resource is e key factor at takes e business to e next level of excellence and achievements. The Board wishes to place on e record its appreciation of e contributions made by all employees ensuring high levels of performance and grow during e year. During e year e Company launched e initiative where an employee can obtain e assiance from HR Department at will deal in providing solutions on any problem faced by e employee during his / her employment. 18

22 Prakash Steelage Ltd. Annual Report Acknowledgements Your Directors place on record eir sincere appreciation to Stock Exchanges, shareholders, banks, government auorities, business associates and oer akeholders. The Board also recognizes e contribution of e valued cuomers in e grow of e Company and takes is opportunity to pledge e Company's commitment to serve em. Your Directors also wish to place on record eir deep sense of appreciation for e hard work, cooperation, solidarity, dedication and commitment displayed by all executives, officers and aff during e year, resulting in e successful performance of e Company. Regd. Office: 701, Mahalaxmi Chambers Bhulabhai Desai Road Mahalaxmi, Mumbai Place: Mumbai Date: 13 Augu, 2014 CIN: L27106MH1991PLC Tel.: Fax: Website: inveorsgrievances@prakasheelage.com On Behalf of e Board of Directors For Prakash Steelage Limited Sd/- Prakash C. Kanugo (Chairman & Managing Director) DIN :

23 Annexure to e Directors' Report Information under Section 217(1)(e) of e Companies Act, 1956, read wi Companies (Disclosure of Particulars in e Report of e Board of Directors) Rules, ) Conservation of Energy The Company rough its dedicated team of engineers has been monitoring various plant and machinery and processes to reduce energy consumption. All possible measures have been taken by e Company to achieve is objective. i) Power & Fuel Consumption FORM A Particulars A) Power & Fuel Consumption Current Year Previous Year a) Purchase Unit 41,28, ,62,004 b) Total Amount (Rs.) 2,93,95, ,02,25,354 c) Rate Per Unit (Approx.) (Rs.) B) Own Consumption a) Through Diesel Generator (Unit) 91, ,70, b) Through Steam Turbine Nil Nil C) L.P.G. Consumption Gas Cylinders (kgs.) 54, ,28,863 Total Co (Rs.) 37,34, ,95,690 Average rate (Rs.) D) Consumption of Coal Quantity (In Kgs.) 930 2,05,150 Total Co (Rs.) 8,960 14,03,696 Average rate (Rs.) E) CNG Consumption Quantity (In Kgs.) 7,46, ,10, Total Co (Rs.) 3,85,48, ,31,97,758 Average rate (Rs.) Product (wi details)-( M. Ton) S.S Pipe & Tube S.S Pipe & Tube Electricity Units Consumed Per Unit

24 Prakash Steelage Ltd. Annual Report FORM B ii) Form for disclosure of particulars wi respect to absorption of research and development (R&D): no specific area for R & D 1) Specify area in which research and development activity carried out by e company Quality & Product Range 2) Benefit derived as a result of above R & D Quality Improvement 3) Future plan of action Continuous Process 4) Expenditure on R & D a) Capital Not Material b) Recurring - c) Total - d) Total R & D expenditure as percentage of total turnover - iii) Technology absorption, adaption and innovation 1) Efforts in brief made towards technology absorption adoption Continuous and innovation 2) Benefits derived as a result of e above efforts, e.g. product Quality Improvement development 3) In case of imported technology (imported during e la 5 years reckoned from e beginning of e financial year) following information may be furnished: a) Technology imported - b) Year of import - c) Technology has been fully absorbed - d) If not fully absorbed area where is has not taken place reason ereof and future - iv) Foreign Exchange Earning and Outgo FORM C The Company has exported its products during e year under review and has also imported raw materials, ores and capital items, e details of which are as follows; (Rs. In Lacs) Particulars Current Year Previous Year 1) FOB value of Export 12, , ) CIF value of Imports 8, , ) Expenditure in foreign currency The Company has so far exported to 50 countries worldwide. The Company is furer exploring to African, Sou American and Sou Ea Asia to increase its exports. For and on behalf of e Board of Directors Place : Mumbai Date : 13 Augu, Sd/- Prakash C. Kanugo ( Chairman & Managing Director) DIN :

25 MANAGEMENT DISCUSSION AND ANALYSIS REPORT FOR THE FINANCIAL YEAR The Board takes pleasure in presenting your Company's Twenty-ird Annual Report for e year along wi e compliance report on Corporate Governance. This chapter on Management Discussion and Analysis forms a part of e compliance report on Corporate Governance. Indury Overview The year marked a subtle turnaround in e fortunes of e global economy. Europe witnesses greater financial ability and ere were signs of revival in a number of its conituent nations, led by Germany and U.K. The U.S. too saw better employment numbers and an improvement in its grow prospects which prompted its leaders to consider widrawing e easy money policies at bolered e economy. Emerging markets, however, experienced some deceleration in eir grow. On e domeic front, e economy seems to have finally bottomed out. After dipping to 4.5% during e previous year, GDP grow recovered to grow at 4.9%, largely due to revival in agriculture grow. However, e volatile rupee, ubborn inflation and agnant indurial production continued to be a drag on e economy. Looking ahead, ere are indications of a turnaround on account of better global grow, an improvement in export competitiveness and e implementation of recently approved invement projects. Additionally, e formation of a rong and able government at e Centre is expected to augur well for India's economy due to speedier implementation of progressive policies. Until now, agnant domeic grow hurt consumer sentiments which were reflected in subdued demand and consumption. Furer, e inflationary impact on raw material prices, largely due to e depreciation in Rupee, led to frequent price increases. Domeic demand for your Company's product was comparatively alough not as good as expected. Demand from e export region was relatively better and encouraging an e domeic region which remained agnant. At e international business level, despite a persiently challenging global environment, some markets where your Company operates showed sign of recovery. A tight Control on expenses and lower raw material inflation helped e international operations of e Company to deliver a rong performance despite difficult market conditions. India has become e second be in terms of grow among e top ten eel producing countries in e world and a net exporter of eel during Steel production in India recorded a grow rate of 4.8 per cent in February, 2014 over February, The cumulative grow during April February, ood at 4.2 per cent over e corresponding period of e previous year. Steel contributes to nearly two per cent of e gross domeic product (GDP) and employs over 500,000 people. The total market value of e Indian eel sector ood at US$ 57.8 billion in 2011 and is expected to touch US$ 95.3 billion by The infraructure sector is India's large eel consumer, ereby attracting invements from several global players. Owing to is connection wi core infraructure segments of e economy, e eel indury is of high priority right now. Also, eel demand is derived from oer sectors like automobiles, consumer durables and infraructure; erefore, its fortune is dependent on e grow of ese user induries. Steel caings Indury is considered to be e backbone of engineering indury serving Automotive, Agricultural, Mining and Earmoving Equipment Indury and almo all downream engineering indury. The FY was challenging wi lower grow in indurial production mainly due to continuing high rate of inflation and depreciation of e rupee. These factors had an adverse impact on e economy resulting in lower GDP grow rate. Rising input cos, slow pace of indurial production, infraructure development and e impact of global slowdown conrained e performance of e indury. All mo all sectors regiered lower grow rate during FY Hence, it affects Steel indury as well. The Indian eel indury is largely iron-based rough e bla furnace (BF) or e direct reduced iron (DRI) route. Indian eel indury is highly consolidated. About 60% of e crude eel capacity is resident wi 22

26 Prakash Steelage Ltd. Annual Report Integrated Steel Producers (ISP). But e changing ratio of hot metal to crude eel production indicates e increasing presence of secondary eel producers (non integrated eel producers) manufacturing eel rough scrap route, enhancing eir dependence on imported raw material. Wi urban population increasing globally, ere is a greater need for eel to build public-transport infraructure. Emerging economies will also continue to be a major driver of demand as ese necessitate a huge amount of eel for urbanisation and indurialisation. The sector is expected to see an invement to e tune of about Rs. 2 trillion (US$ billion) in e coming years. India's rank in e world order of eel production remained unchanged at four slot wi an output of 81.2 million tonnes, despite logging e highe grow of 5.05% among major producing nations in There was no change in e top ree eel producing nations wi China, Japan and e US retaining eir slots in e respective order in 2013, World Steel Association (WSA) data revealed. Government Initiative The liberalisation of e indurial policy and oer government initiatives have given a definite impetus for entry, participation and grow of e private sector in e eel indury. The Government of India has allowed 100 per cent FDI rough e automatic route in e Indian eel sector. It has significantly reduced e duty payable on finished eel products and has reamlined e associated approval process. In order to provide ru on research and development (R&D), e Miniry of Steel is encouraging R&D activities bo in public and private eel sectors, by providing financial assiance from Steel Development Fund (SDF) and Plan Scheme of e Central Government. Under e SDF scheme, 82 R&D projects have been approved wi total project co of Rs 677 crore (US$ million) wherein SDF assiance is Rs 370 crore (US$ million). Under e Plan Scheme, eight projects were approved wi a total co of Rs crore (US$ million) wherein Government assiance is Rs crore (US$ million). To encourage beneficiation and pelletisation of iron ore fines in e country, basic cuoms duty on e plants and equipment required for initial setting up or subantial expansion of iron ore pellets plants and iron ore beneficiation plants has been reduced from 7.5 per cent to 2.5 per cent. Import of critical raw materials for eel indury, such as coking coal, non-coking coal and scrap are subject to zero or very low levels of cuom duty. Business Overview We are into e business of manufacturing ainless eel pipes, tubes for more an 22 years. Since inception, we have made efforts to place our self in a competitive position in e indury by proactively responding to our cuomer requirements. The Company has emerged as one of e leading manufacturers of ainless eel welded, seamless pipes and tubes in India and caters to bo e markets domeic as well as International. At present e Company has e cuomers from oil and gas sector, power sector, desalination and nuclear power plants, Engineering, Capital Goods, Chemical, Sugar and various oer core sector Induries. We want to leverage our reng to our benefit in future so as to become e topmo player in e ainless eel tube indury. We wish to continue to supply our products to corporate houses, increase our market share in e indury, produce quality products at e competitive rates, adopt one of e be human resource practices and also secure various certifications for andards and quality improvement. We plan to boo our exports by participating in trade fairs and exhibitions all over e World. The Company is manufacturing ainless eel welded, seamless pipes and tubes and has setup two indurial plants at Silvassa and Umbergaon. Having set up its fir Plant at Silvassa in e year 1996 wi a capacity of 4,000 MT p.a., e Company expanded its capacity by setting up anoer plant at Umbergaon in Gujarat and presently has total capacity of 20,500 MT during e year Furer by considering e potential of grow in Real eate, it has been decided to enter into conruction business rough rategic alliance which will rengen e Company's performance in one more pillar of grow. 23

27 Prakash Steelage Limited employs extensive internal controls, company-wide uniform reporting guidelines and additional measures, including employee training and continuing education, to ensure at its financial reporting is conducted in accordance wi accepted accounting principles. Your Company always believed at keeping a keen ear to market demand and feedback goes a long way. We have kept e cuomer at e center of all our rategies and is approach of Cuomer Centricity is paying dividends. Indurial Structure Indian iron and eel indury can be divided into two main sectors Public Sectors and Private Sectors. Furer on e basis of routes of production, e Indian indury can be divided into two types of producers. Integrated producers: Integrated producers are ose at can convert iron ore into eel; Secondary producers: Secondary producers are e mini eel plants which make eel by melting scrap or sponge iron or a mixture of e two. There are currently 100 small and medium scale units and 4 to 5 organised units engaged in manufacturing of ainless eel welded, seamless pipes and tubes. The domeic demand presently for ainless eel welded pipes and a tube is about 1,00,000 MT which is expected to increase up to 2,75,000 MT by e year 2015/16. The top players globally in is segment are Valtimet/ Tubacex/ Centravis. Company specialises in meeting specific requirements of cuomers and offers complete solution for ainless eel welded and seamless pipes and tubes. The type of product varied based on e type, shape and size of e same some of which are as lied below: S.S. Welded Tubes S.S. Welded Pipes S.S. EFW Pipes S.S. Seamless Tubes S.S. Seamless Pipes Square Tubes U Bend Tubing S.S. Seamless Moer Hollows Subsidiaries and Strategic Alliance During e year your Company has incorporated its wholly-owned subsidiary, Pioneer Stainless & Alloys, FZC at Ajmen Free Zone, Dubai U.A.E wi an object of import and export of Steel and Basic Steel products to Asian and European countries. During e year your Company embarked on a new journey by expanding its business activities in one more ream, by making a Strategic Alliance wi M/s. Karagwal Developers Private Limited for developing its idle land located at Taluka Umbergaon, Village Palgam, Dirict Valsad, Gujarat. Under e said Strategic Alliance e Company has introduced Krishna Indurial Park, where e Company has built indurial plots for factories, warehouses, workshops, service ations, etc. It is e ideal deination to set-up small and medium-sized enterprises like textile induries, ainless eel induries, manufacturing units, automobile induries, food & agriculture induries, mineral induries, cold orage, warehouse, etc. wi world-class infraructure facilities. Financial Performance This report, Management's Discussion and Analysis, provides an overview of e financial position and results of activities of Prakash Steelage Limited (e "Company") for e year ended. It has been prepared by management and is required supplemental information to e financial atements and e footnotes at follow is section. The income from operations for e year has increased to Rs.94, Lacs as compared to Rs.79, Lacs in e previous year reflecting a grow of 19.04%.The profit before tax is Rs.2, Lacs as again 24

28 Prakash Steelage Ltd. Annual Report Rs.2, Lacs in e previous year reflecting an increase in Profit by 22.97%. The Net Profit after Tax is Rs.1, Lacs as aga1, Lacs in e previous year reflecting an increase of profit by 17.98%. The Earning per Share (EPS) works out to be Rs.9.46 per share. Outlook The outlook for e Company's Business in future is very good. The Management expects CAGR of over 30% during next five years. The Government of India has allowed 100 per cent FDI rough e automatic route in e Indian eel sector. It has significantly reduced e duty payable on finished eel products and has reamlined e associated approval process. The demand for eel is increasing and e prices have also firmed up during e year under report. The increase in eel making capacity by e Company will be absorbed by e increasing demand for eel products. India's grow ory was, till recently, quite attractive in comparison wi many oer developed and developing economies. Reforms in global economy indicate positive signal for overseas market. Opportunities and Threats The Indian eel indury has entered into a new development age from , riding high on e resurgent economy and rising demand for eel. India, a developing nation, requires huge contribution from is indury, to expedite its run to reach new heights in world economy. India has large reserves of mineral resources, such as, coal, iron ore etc. and is in a rong position to mobilise ese resources into productive use. Va market potential wi increasing Induries provides assured market to e indury. Recovery in Indian economy during has given rise to new invement opportunities which will increase demand for eel products. The demand for eel is increasing and e prices have also firmed up during e year under report. The increase in eel making capacity by e Company will be absorbed by e increasing demand for eel products. Any change in e foreign exchange control regulation, mainly intere rates and tax laws pertaining to India affects e liquidity of cash in e market which in turn affects e purchasing power of e economy. The global economy is reviving from slowdown and would offer better business opportunities in near future. Furer, able government placed in India would indicate positive grow signal for an Indian Indury ough in near term some short term challenges. Our grow plans are considerable and would put significant demands on our management team and oer resources. Any delay in implementation of its rategy and its grow and expansion plans could impact e Company's roll out schedules and cause co and time over runs. Risk is inherent in every business activity and Steel Indury is no exception. The Company is exposed to risks from overall market fluctuations, changes in government policy, laws of e land, taxation, man made disaer, political risks and increase in co of inputs like Iron ore, coal, power, diesel, freight, etc. which affect e financial performance of e Company. Risk Management Risk Management comprises ree key components which are as below: (I) Risk identification (ii) Risk assessment and mitigation (iii) Risk monitoring and assurance Your Company has identified e following aspects as e major risks for its operations: (i) (ii) (iii) Economic Risk Foreign Exchange Risk Indurial Risk The risk mitigation plans are reviewed regularly by e Audit Committee of your Company. 25

29 Internal Control Syems and eir Adequacy The Company has proper and adequate syem of internal controls commensurate wi its size and nature of operations to provide reasonable assurance at all assets are safeguarded, transactions are auorised, recorded and reported properly and applicable atutes are duly complied wi. The Company has conituted an Audit Committee to monitor e adequacy and efficacy of internal control syem. The Internal Control Syems are reviewed periodically and revised to keep in tune wi e changing business environment. The Company's internal control syems are supplemented by an extensively programmed of internal control conducted by an external auditor, emphasis of internal control prevails across and ensure adequacy of e control syem, adherence to management inructions and legal compliances. Certification Prakash Steelage Limited is an ISO , ISO , ISO , PED certified and AD Merkblatt WOEIL, Lloyds, IBR Approved and Government recognized Star Export House. Human Resource Development Your Directors recognize e value of people as one of our mo valuable assets and believe at your Company's employees are central to its suainable success. Developing, motivating, rewarding and retaining talented employees at all levels is a priority and a key responsibility of your Company's management. The Company has also provided insurance cover & has undertaken lot of welfare measures for e Employees. It is is policy of ours at has enabled us to retain talented employees and maintain harmonious relations wi em. During e year HR Department has implemented various activities at are booing e interes of employees: Medical campaign for eye check-up of e plant employees Cricket tournament for all e HO and plant employees Annual get togeer of e Umbergaon plant employees The employee relations continues to be e key focus of your Company and several initiatives were taken out for promoting e core value of being a trued, fair and caring employer. Statutory compliance The Company Secretary, as e Compliance Officer of e Company, ensures compliance of e SEBI regulations and provisions of e Liing Agreements. Compliance certificates are obtained from various units of e Company and e Board is informed of e same at every Board Meeting. Cautionary atement Statements in is management discussion and analysis report describing e Company's objectives, projections, eimates and expectations may be termed as forward looking atements wiin e meaning of applicable laws and regulations. Actual results may differ materially from ose eier expressed or implied. The readers of is report are, erefore, advised to read e same wi is caution The Company assumes no responsibility to publicly modify or revise any forward looking atements on e basis of any future events or new information. For & on behalf of Board Place : Mumbai Date : 13 Augu, 2014 Sd/- Prakash C. Kanugo ( Chairman & Managing Director) DIN :

30 Prakash Steelage Ltd. Annual Report Corporate Governance Report In accordance wi Clause 49 of e Liing Agreement wi BSE Limited (BSE) and e National Stock Exchange of India Limited (NSE) (Clause 49) and some of e be practices followed internationally on Corporate Governance, e report containing e details of corporate governance syems and processes at Prakash Steelage Limited is as under: Company's Philosophy Your Company has formulated and implemented sound principles of Corporate Governance as per Clause 49 of e Liing Agreement entered wi e Stock Exchanges. It believes at for a Company to be successful it mu maintain Global Standards of Corporate Conduct towards its akeholders. It is rewarding to be better managed and governed and to identify its activities wi e National intere. To at end, your Company has always focused on good Corporate Governance which is e key driver of suainable grow and long term value addition. Your Company believes in transparency and openness in e working of e management and Board. Your Company views corporate governance in its wide sense almo like a trueeship, a philosophy to be progressed, a value to be imbibed and an ideology to be ingrained into e corporate culture, as per e requirement of applicable law of Stock Exchanges and applicable provisions of bo e Companies Act, 1956, and Companies Act, 2013, and e Rules made ereunder. Your Directors submit eir report on e matters and practices followed by e Company. Board of Directors The Board of Directors of e Company comprises of an optimum combination of Executive and Non- Executive Directors / Independent Directors. The Board is headed by an Executive Chairman. There are Four Non Executive/Independent Directors and Four Executive Directors. The Board of Directors of e Company formulates rategies, policies and reviews its performance periodically. The Chairman & Managing Director (CMD) and Whole-time Directors manages e business of e Company under e overall supervision, control and guidance of e Board. The name, category and designation of e Directors on e Board, eir attendance at Board Meetings during e year and at e previous Annual General Meeting held on 14 Augu, 2013, and also e number of Directorships and Committee Memberships held by em in oer Companies are given below: Name of e Director and Designation Attendance at e Meeting held during Board Meeting La AGM Mr. Prakash C. Kanugo Chairman & Managing Director 4 Yes - Mr. Ashok M. Se Whole-time Director (Executive) 3 Yes - Mr. Hemant P. Kanugo Whole-time Director (Executive) 4 Yes - Mr. Kamal P. Kanugo Whole-time Director (Executive) 3 Yes - Dr. Bipin C. Doshi Independent Director (Non-Executive) 3 No - Mr. Himanshu J. Thaker Independent Director (Non-Executive) 3 No - Mr. A. Prakashchandra Hegde Independent Director (Non-Executive) 4 Yes - Mr. Gautam Chand C. Jain Independent Director (Non-Executive) 3 Yes - No. of Directorship in oer Companies* * None of e Directors are holding committee membership or Chairmanship of e committee of oer Companies. Also e directorship in e Private Limited, foreign companies and Companies under Section 8 of e Companies Act, 2013 are not considered in e above table. 27

31 Board Meetings During e year, Four Board meetings were held, details of which are given in e table below: Date of e Meeting No of Directors Present The Board Meetings are generally held at e Regiered Office at 701, Mahalaxmi Chambers, Bhulabhai Desai Road, Mahalaxmi, Mumbai Board Responsibilities The Board meets once in every quarter to review e quarterly financial results and operations of e Company. In addition to e above, e Board also meets as and when necessary to address specific issues concerning e business. The Board meetings are governed by a ructured Agenda. The Agenda along wi detailed explanatory notes and supporting material are circulated well in advance before each meeting to all e Directors. This ensures timely and informed decisions by Board. The Board members may bring up any matter for consideration of e Board, in consultation wi e Chairman. The Board meets periodically to review financial performance of e Company and e Basic governance responsibilities. As truees of e shareholders, e Board is entrued wi ultimate responsibility of providing direction to e Company in terms of approving e rategy, maintaining eir integrity, enhancing eir performance and ensuring at e Company operates in e be interes of e shareholders and oer akeholders. Role of Independent Directors The Non-Executive Independent Directors complies wi e criteria of Independence specified under Section 149 of Companies Act, 2013, and e Rules made ereunder and also meets e requirements of Clause 49 of Liing Agreement entered into wi e Stock exchanges. The Independent Directors bring to e Company a wide range of experience, knowledge and judgement as ey draw on eir varied proficiencies in economics, management, and accountancy. The Independent Directors performs e various duties and functions which are specified under Schedule IV of e Companies Act, Profile of Directors under Clause 49 IV (G) of Liing Agreement In compliance wi Clause 49IV(G) of Liing Agreement, brief resume, expertise and details of oer directorship, membership in committees of Directors of oer Companies and shareholding in e Company of e Directors proposed to be re-appointed / appointed are attached along wi is report. Committees of e Board The Board has reviewed and approved e revised terms of reference of e Audit Committee, Nomination & Remuneration Committee and Stakeholders' Relationship Committee so as to align e same wi e relevant provisions of e Companies Act, 2013, e Rules made ere under and revised Clause 49 of e Liing Agreements relating to Corporate Governance. The Board also approved e changes in nomenclature of e Remuneration Committee to Nomination and Remuneration Committee and Shareholders'/Inveors' Grievance Committee to Stakeholders' Relationship Committee. The Board also approved conitution of Corporate Social Responsibility Committee (CSR). A) Audit Committee The Audit Committee of e Company was conituted on 25 Augu, The Audit Committee comprises of ree Non-executive Independent Directors - Mr. Gautam Chand C. Jain, Dr. Bipin C. Doshi and Mr. A. Prakashchandra Hegde and one Whole-time Director, Mr. Ashok M. Se. Four Audit Committee Meetings were held during e year on 30 May, 2013, 14 Augu, 2013, 12 November, 2013, and 14 February,

32 Prakash Steelage Ltd. Annual Report Name of e Members Status at e Committee Nature of Directorship No. of e Meeting attended Mr. Gautam Chand C. Jain Chairman Independent Director 3 Dr. Bipin C. Doshi Member Independent Director 3 Mr. A. Prakashchandra Hegde Member Independent Director 4 Mr. Ashok M. Se Member Whole-time Director 3 The Chairman of e Audit Committee was present at e Company's la Annual General Meeting held on 14 Augu, The Audit Committee meetings considered all e points in terms of its reference at periodic intervals. The Audit Committee of e Company is entrued wi e responsibility to supervise e Company's Internal Control and Financial Reporting Process. The terms of reference of e Audit Committee are in accordance wi all e items lied in Clause 49 of e Liing Agreement. Terms of Reference a. Overseeing e Company's financial reporting process and e disclosure of its financial information to ensure at e financial atements are correct, sufficient and credible. b. Recommending to e Board, e appointment, re-appointment and if required, e replacement or removal of e atutory auditor and fixation of audit fee. c. Approval of payment to atutory auditors for any oer services rendered by e atutory auditors. d. Recommendation to e Board of Directors, e appointment of Co Auditor for e Company. e. Reviewing wi e management e annual financial atements before submission to e Board for approval, wi particular reference to: Matters required to be included in e Director's Responsibility Statement to be included in e Board's report in terms of Clause (2AA) of Section 217 of e Companies Act, 1956; Changes, if any, in accounting policies and practices and reasons for e same; Major accounting entries involving eimates based on e exercise of judgment by management; Significant adjuments made in e financial atements arising out of audit findings; Compliance wi liing and oer legal requirements relating to financial atements; Disclosure of any related party transactions; & Qualifications in e draft audit report. f. Reviewing, wi e management, e atement of uses/ application of funds raised rough an issue (public issue, rights issue, preferential issue, etc.). g. Reviewing, wi e management, Statutory Auditor and Internal Auditor report, and adequacy of e internal control syems and recommending improvements to e Management. h. Reviewing e adequacy of internal audit function, if any, including e ructure of e internal audit department, affing and seniority of e official heading e department, reporting ructure coverage and frequency of internal audit. i. Discussion wi internal auditors any significant findings and follow up ereon. j. Reviewing e findings of any internal inveigations by e internal auditors into matters where ere is suspected fraud or irregularity or a failure of internal control syems of a material nature and reporting e matter to e Board. k. Discussion wi atutory auditors before e audit commences, about e nature and scope of audit as well as po-audit discussion to ascertain any area of concern. 29

33 l. To look into e reasons for subantial defaults in e payment to e depositors, debenture holders, shareholders (in case of nonpayment of declared dividends) and creditors. m. To review e functioning of e While Blower mechanism of e Company as per While Blower policy. n. Approval of appointment of CFO (i.e., e whole-time Finance Director or any oer person heading e finance function or discharging at function) after assessing e qualifications, experience and background etc. of e candidate. o. Reviewing appointment, removal and terms of remuneration of e internal auditor(s). p. Carrying out any oer function as is mentioned in e terms of reference of e Audit Committee. q. The scope of Audit Committee has been widened to include following additional matters which Audit Committee is required to look into as per e provisions of Companies Act, 2013: 1. To review and monitor e auditor's independence and performance, and effectiveness of audit process. 2. To approve and/or subsequently modify e transactions of e company wi related parties. 3. Scrutiny of inter-corporate loans and invements. 4. Valuation of undertakings or assets of e company, wherever it is necessary. 5. Evaluation of internal financial controls and risk management syems. The meetings of e Audit Committee during e year were held as per Clause 49 of e Liing Agreement. The Audit Committee meetings were also attended by e representatives of e Statutory Auditors, Internal Auditors and e Chief Financial Officer of e Company. The Company Secretary acts as e Secretary to e Committee and attends e meeting. B) Nomination and Remuneration Committee (erwhile Remuneration Committee) Pursuant to e provisions ipulated in Schedule XIII to e Companies Act, 1956, and Clause 49 of e Liing Agreement wi Stock Exchanges, Remuneration Committee of e Board was conituted on 25 Augu, The Board at its meeting held on 29 May, 2014 re-named its exiing Remuneration Committee as Nomination and Remuneration Committee as per e provisions of Section 178 of e Companies Act, 2013, and also reconituted e said committee wi e following Directors as it members: Name of Director Status 30 Nature of Directorship Mr. Himanshu J. Thaker Chairman Independent Director Dr. Bipin C. Doshi Member Independent Director *Mr. A. Prakashchandra Hegde Member Independent Director * Inducted as member of e committee wi effect from 29 May, 2014 in place of Mr. Hemant P. Kanugo. During e year under review one meeting of e Remuneration Committee was held on 30 May, 2013 Name of e Members Status Nature Attended Mr. Himanshu J. Thaker Chairman Independent Director Yes Dr. Bipin C. Doshi Member Independent Director Yes Mr. Hemant P. Kanugo Member Whole-time Director Yes Remuneration Policy The remuneration payable to e Managing Director and e Whole-time Directors are recommended by e Remuneration Committee of e Board of Directors. The remuneration ructure of Managing Director and e Whole-time Directors comprises of salary, perquisites, allowances, performance bonus, commission and contribution to provident funds, superannuation and gratuity funds. Payment of remuneration to e Managing Director and e Whole-time Directors is governed by e Agreement executed between e Managing Director, Whole-time Directors and e Company. The Agreement is also approved by e Board and e shareholders of e Company in terms of Schedule XIII to e Companies Act, 1956.

34 Prakash Steelage Ltd. Annual Report The details of remuneration paid/ payable to e Directors during e financial year are as under Name of e Director Remuneration (Rs.) Perquisites (Rs.) Sitting Fees (Rs.) Total (Rs.) Mr. Prakash C. Kanugo 13,50,000 90,000 NA 14,40,000 Mr. Ashok M. Se 10,50,000 1,86,655 NA 12,36,655 Mr. Hemant P. Kanugo 7,50,000 - NA 7,50,000 Mr. Kamal P. Kanugo 6,30,000 - NA 6,30,000 Shareholding of Directors as on Name of e Directors No of Equity Shares Held Mr. Prakash C. Kanugo 37,83,500 Mr. Ashok M. Se 4,48,400 Mr. Hemant P. Kanugo 5,61,753 Mr. Kamal P. Kanugo 5,57,752 Dr. Bipin C. Doshi (Non Executive) Mr. Himanshu J. Thaker (Non Executive) Mr. A. Prakashchandra Hegde (Non Executive) Mr. Gautam Chand C. Jain (Non Executive) Nil Nil Nil Nil The sitting fees were paid to e Independent Directors till e meeting held on 14 Augu, 2013, for attending e Board Meeting was Rs. 5,000/- per meeting and for attending e Audit Committee Meeting Rs. 2,000/- per meeting to each Independent Directors of e Company. Furer, e Board of Directors at its meeting held on 12 November, 2013, increased e sitting fees to be paid by e Company to e Independent Directors to Rs.15,000/- per Board meeting and Rs.5,000/- per Audit Committee Meeting. However no fee has been recommended by Board for attending e meetings of Inveors' Grievance Committee, Remuneration Committee and Executive Committee. Sitting fees paid to Non Executive Directors during e year. Name of e Directors Board Meeting Sitting Fees (Rs.) Audit Committee Dr. Bipin C. Doshi 25,000 9,000 Mr. Himanshu J. Thaker 25,000 NA Mr. A. Prakashchandra Hegde 40,000 14,000 Mr. Gautam Chand C. Jain 25,000 9,000 There is no pecuniary or business relationship between e Non-executive Directors / Independent Directors and e Company. Your Company benefits immensely from e expertise and invaluable experience of e Non-executive / Independent Directors in achieving corporate excellence. C) Stakeholders Relationship Committee (erwhile Shareholders'/ Inveors' Grievances Committee) The Shareholders and Inveors Grievances Committee was conituted at e Board meeting held on 25 Augu, The Board at its meeting held on 29 M ay, 2014 re-named its exiing Shareholders'/ Inveors' Grievances Committee as 'Stakeholders' Relationship Committee' as per e provisions of Section 178 of e Companies Act, 2013, and also re-conituted e said committee wi e following Directors as it members: 31

35 The composition of e Committee as at is as follows. Name of Director During e financial year ere was no meeting of e Committee held during e period under review. Stakeholders Relationship Committee has been conituted specifically to look into e redressal of Inveors' complaints like transfer of shares, non-receipt of balance sheet and non-receipt of dividend, etc. Shareholders' Reques / Complaints Particulars Complaints Received Resolved Pending D) Executive Committee Status at e Committee Nature of Directorship Dr. Bipin C. Doshi Chairman Independent Director Mr. Himanshu J. Thaker Member Independent Director Mr. Ashok M. Se Member Whole-time Director The details of shareholders' reque/complaints received and replied by e Company during e year ended 31 March, 2014 are as under: Non-receipt of Annual Report 1 1 Nil Non-receipt of Dividend 6 6 Nil Total 7 7 Nil The Executive Committee was conituted by e Board of Directors at its meeting held on 12 November, 2010 comprising of following Directors in order to have convenience in expediting day to day matters relating to company' affairs like finance, management etc. The composition of e Committee as at is as follows. Name of Member Mr. Prakash C. Kanugo Chairman & Managing Director Mr. Ashok M. Se Whole-time Director Mr. Hemant P. Kanugo Whole-time Director Mr. Kamal P. Kanugo Whole-time Director Status at e Committee Chairman Member Member Member Terms of Reference The Committee shall have e following powers subject to e provisions of e Companies Act, 1956, and oer applicable acts and oer rules and provisions: a. To borrow funds from banks, financial initution, finance companies and oer lenders from time to time again security of hypoecation of goods or mortgage of assets, pledge of securities / goods or mercantile and at such rate of intere and terms and conditions of repayment etc. as would be beneficial to e Company. b. To inve surplus funds for short period. c. To lend money or give loans or security or guarantee to and from banks, financial initutions, finance companies or oers in connection wi facilities granted to e Company. d. To open / close bank accounts and to auorise Company's executives / officers as auorised signatory to operate bank accounts and to widraw such auority from time to time. e. To grant Power of Attorney / revoke any Power of Attorney earlier granted from time to time as and when required. 32

36 Prakash Steelage Ltd. Annual Report f. To execute agreements relating to appointment of diributors / dealers / ockie, retailers or such oer agreements or documents which are required to be executed under e common seal of e Company, but excluding any related party transaction. g. To sanction any foreign tour by executives of e Company for e Company's business. h. To enter into Joint Venture or oer business agreement / arrangement for expanding e business activity of e Company. The decisions of e executive committee are to be ratified in e subsequent Board meetings E) Corporate Social Responsibility (CSR) Committee The Board at its meeting held on 29 M ay, 2014 approved e conitution of Corporate Social Responsibility (CSR) Committee. The CSR committee of e Company comprises of following directors as members of Committee. Name of Member Dr. Bipin C. Doshi Independent Director Mr. Ashok M. Se Whole-time Director Mr. Hemant P. Kanugo Whole-time Director Status at e Committee Chairman Member Member The role of CSR Committee is as follows: Formulating and recommend to e Board, a CSR policy and activities to be undertaken by e Company. Recommending e amount of expenditure to be incurred on e activities undertaken. Reviewing performance of e company in e area of CSR. Monitoring e CSR policy of e Company from time to time Subsidiary Companies Your company has a wholly-owned foreign subsidiary named Pioneer Stainless & Alloy, FZC, at Dubai, UAE. The audited results of e wholly-owned foreign subsidiary have been shown in consolidated financial atement of e Company for e year ended. The financial atements are prepared as per AS-21 of issued by e Initute of Chartered Accountants of India. Vigil Mechanism / While Blower Policy In compliance wi e provisions of Section 177 (9) of e Companies Act, 2013, e Board of Directors at eir meeting held on 29 May, 2014 has adopted and eablished a Vigil Mechanism / While Blower Policy for e Directors and employees of e Company to avoid e inances of uneical behaviour, actual or suspected, fraud or violation of e Company's code of conduct. The said policy has been poed on e website of e Company. Insider Trading Code Pursuant to e requirements of e SEBI (Prohibition of Insider Trading) Regulations, 1992, as amended, e Board of Directors of e Company has adopted a Code of Conduct for Prevention of Insider Trading in e Equity Shares of e Company. This Code is applicable to all Directors and such designated employees who are expected to have access to unpublished price sensitive information relating to e Company. Ms. Pallavi P. Shedge, Company Secretary, is e Compliance Officer for monitoring adherence to e said Regulations. Annual General Meetings Location, time, date and venue of e AGMs held during e preceding 3 years are as follows: 33

37 Year Location Date Time Walchand Hirachand Hall, 12 Augu, P.M. (4 floor) IMC Building, Churchgate, Mumbai Victoria Memorial School for e Blind, 14 Augu, P.M. Opp. A. C. Market, Tardeo, Mumbai Victoria Memorial School for e Blind, 14 Augu, P.M. Opp. A. C. Market, Tardeo, Mumbai Details of Special Resolution(s) at Annual General Meetings held during e la ree years: AGM held on 14 Augu, 2013: a. Re-appointment of Mr. Prakash C. Kanugo as e Managing Director. b. Re-appointment of Mr. Ashok M. Se as a Whole-time Director. c. Re-appointment of Mr. Hemant P. Kanugo as a Whole-time Director. d. Re-appointment of Mr. Kamal P. Kanugo as a Whole-time Director. Details of e Special resolution(s) passed at Extraordinary General Meeting during e la ree years. There was no Special resolution passed during e la ree years in any Extraordinary General Meeting. There was no resolution passed rough poal ballot during e year. Disclosures The Company does not have any materially significant commercial and financial transactions wi any of e related parties i.e. Promoters, Directors, Relatives, Associated Company or management having conflict, actual or potential, wi e intere of e Company. The Company has complied wi e atutory provisions, rules and regulations relating to e capital markets during e la year. No penalties or rictures were imposed on e Company during e la ree years by any Stock Exchanges, SEBI or any oer atutory auorities on any matters related to capital markets. During e year under review, ere was no audit qualification in e Company's financial atements. The Financial Statements of e Company are prepared in compliance wi Accounting Standards notified under e Companies Act, 1956 read wi e General Circular No 15/2013 dated 13 September, 2013 of e Miniry of Corporate Affairs in respect of Section 133 of e Companies Act, The Managing Director, CEO and oer senior management personnel of e Company make presentation to e Board Members on a periodical basis to ensure at Management controls risk rough a properly defined framework. Code of Conduct Your Company has adopted a Code of Conduct for all e employees including e Board Members and Senior Management Personnel of e Company in accordance wi e requirement under Clause 49(I)(D) of e Liing Agreement. The Code of Conduct has been poed on e website of e Company. All e Board Members and e Senior Management Personnel have affirmed eir compliance wi e said Code of Conduct for e financial year ended. The declaration to is effect signed by Mr. Prakash C. Kanugo, Chairman & Managing Director of e Company forms part of e report. Means of Communication The Company's Quarterly financial results, Half yearly and Annual results after eir approval by e Board of Directors are promptly furnished to BSE and NSE where e Company's Equity are lied and are also published in e newspaper in English and in regional language (Marai). The financial results are also displayed on e Company's website i.e. Press Releases & Corporate Presentations are also displayed on e Company's website. A Management discussion and analysis report, forming part of e Directors report, is being presented in e Annual report. 34

38 Prakash Steelage Ltd. Annual Report Certification by e Managing Director and e Chief Financial Officer (CFO) Mr. Prakash C. Kanugo, Chairman & Managing Director and Mr. Ashok M. Se, Executive Director Finance & CFO, have issued a Certificate to e Board as prescribed under sub clause V of Clause 49 of e Liing Agreement. The said Certificate was placed before e Board Meeting held on 29 May, 2014 in which e Audited Accounts for e Financial Year ended were considered and approved by e Board of Directors. Shareholders' Information 23rd Annual General Meeting Details Day Friday Date 26 September, 2014 Time Venue Financial Year of e Company 04:00 p.m. Victoria Memorial School for e Blind, Opp. A. C. Market, Tardeo, Mumbai Financial Year of e Company is 1 April to 31 March. Book Closure Period From: Saturday, 13 September, 2014 to Friday, 26 September, 2014 (bo days inclusive). Dividend Payment Date The dividend, if approved by e shareholders, shall be paid on or before 25 October, Liing wi Stock Exchanges The Equity Shares of e Company were lied on 25 Augu, 2010 on BSE Ltd. and National Stock Exchange of India Ltd., having ISIN No. INE696K CIN No.: L27106MH1991PLC The Equity Shares of e Company are lied on e following Stock Exchanges: Stock Exchange Scrip Code/ Symbol BSE Ltd. (BSE) P. J. Towers, Dalal Street, Mumbai National Stock Exchange of India Ltd (NSE) Exchange Plaza, Bandra- Kurla Complex, Bandra (Ea), Mumbai PRAKASHSTL Payment of Liing Fees and Annual Cuodial Fees The Annual Liing Fee for e year (as applicable) have been paid by e Company to BSE and NSE. The annual cuodial fees for e year (as applicable) have been paid by e Company to NSDL and CDSL. 35

39 Share price data Monly basis for e Financial Year : Mon BSE NSE High Low High Low April May June July Augu September October November December January February March Monly High Low (BSE) Monly High Low (NSE) Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 0 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 High Price Low Price High Price Low Price Manufacturing Units Silvassa: Survey No. 46/1, Parjai Road, Village: Kherdi, Silvassa , Union Territory Dadra & Nagar Haveli (India) Umbergaon: Plot No.131/1, Umbergaon, Sanjan Road, Umbergaon , Di.Valsad, Gujarat (India) Regirar & Transfer Agents Bigshare Services Private Limited E2/3, Ansa Indurial Eate, Sakivihar Road, Sakinaka, Andheri (Ea), Mumbai Tel: /53 Fax: babu@bigshareonline.com Website: 36

40 Prakash Steelage Ltd. Annual Report Shareholding as on Diribution of Shareholding as on Sr. No. Category Shares Number of Shareholders Percentage of Total Share Amount Percentage of Total , ,65, ,10, ,27, ,89, , ,50, ,82, & Above ,05,76, Dematerialisation of shareholding Total 3, ,50,00, The Company has eablished connectivity wi bo e depositories viz. National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) rough e Regirar- Bigshare Services Private Limited. This has facilitated e shareholders to hold and trade eir shares in 'electronic form'. Almo e entire shareholding (99.99%) is held in dematerialized form wi NSDL 1,42,38,517 Shares (81%) and CDSL 32,61,518 Shares (19%) as on and only 4 shares are in physical form. Dematerialized Position as of NSDL CDSL PHYSICAL Address for Inveor Correspondence Ms. Pallavi P. Shedge Regirar & Transfer Agents Company Secretary & Compliance Officer Bigshare Services Private Limited Prakash Steelage Limited E2/3, Ansa Indurial Eate, 701, Mahalaxmi Chambers, Bhulabhai Desai Road, Sakivihar Road, Sakinaka, Mahalaxmi, Mumbai Andheri (Ea), Mumbai Tel.: Fax : Tel: /53 cs@prakasheelage.com Fax: babu@bigshareonline.com 37

41 Pursuant to Clause 49 (IV)(G) under Corporate Governance of e Liing Agreement wi e Stock Exchanges, e particulars of Independent Director and Whole-time Director who is proposed to be appointed / re-appointed are given below: Mr. A. Prakashchandra Hegde Independent Director (Non-executive) DIN Date of Bir: Date of Appointment: Qualification and Experience: Mr. A. Prakashchandra Hegde is a B. Com., LL.B., CAIIB (I) by qualification. He is a retired General Manager Vijaya bank a public sector bank, having experience of over 39 years in e banking field. As a General Manager of e Bank he was heading Mumbai Region one of e preigious region of e bank and was heading banks retail credit Department at head office Bangalore as General Manager prior to his superannuation. He is e recipient of many awards during his various assignments in e bank, e late one being e 'Be Region' of e bank in Metro category received during e year During his service for e Bank Mr. Hegde has served e bank in nook and corner of e country and participated in overseas training in banking issues conducted by Asian Initute of Management at Manilla Philippine, Euro money training of UK in London, besides RBI and oer renowned domeic financial initutions. Directorships held in oer Public Companies (excluding foreign Companies & Section 25 Companies): Nil Memberships/Chairmanships of committees of oer Public Limited Companies (includes only Audit Committee and Shareholders/Inveors Grievance Committee): Nil Number of Equity shares held in e Company: Nil Relationship wi oer Director: None Mr. Gautam Chand C. Jain Independent Director (Non-executive) DIN Date of Bir: Date of Appointment: Qualification and Experience: Mr. Gautam Chand C. Jain is a Chartered Accountant by qualification. He is currently employed wi KBS Capital Management Limited as a Senior Analy since June He has also worked wi Morgan Stanley as Senior Associate in e Invement Banking Division from April 2006 to May Directorships held in oer Public Companies (excluding foreign Companies & Section 25 Companies): Nil Memberships/Chairmanships of committees of oer Public Limited Companies (includes only Audit Committee and Shareholders/Inveors Grievance Committee): Nil Number of Equity shares held in e Company: Nil Relationship wi oer Director: None 38

42 Prakash Steelage Ltd. Annual Report Dr. Bipin C. Doshi Independent Director (Non-executive) DIN Date of Bir: Date of Appointment: Qualification and Experience: Dr. Bipin C. Doshi is a physician wi MBBS from University of Mumbai and MS in counseling from Mumbai. He is also a po graduate in Pediatrics & Medico legal Syem from Fellow College of General Practitioner & College of Che Physicians from Pune. Directorships held in oer Public Companies (excluding foreign Companies & Section 25 Companies): Nil Memberships/Chairmanships of committees of oer Public Limited Companies (includes only Audit Committee and Shareholders/Inveors Grievance Committee): Nil Number of Equity shares held in e Company: Nil Relationship wi oer Director: None Mr. Himanshu J. Thaker Independent Director (Non-executive) DIN Date of Bir: Date of Appointment: Qualification and Experience: Mr. Himanshu J. Thaker has done his graduation in Metallurgical Engineering (B.E. Metallurgy) from MS University Vadodara in e year He has almo 25 years of experience in e Indury. He has been associated wi Companies like Jyoti Limited, Vadodara, Gujarat Steel Tubes Ltd, Gujarat Gajara Pinions Ltd., Keyone India Ltd, Ratnamani Metals & Tubes Limited, Suzlon Structures Ltd. etc. Directorships held in oer Public Companies (excluding foreign Companies & Section 25 Companies): Nil Memberships/Chairmanships of committees of oer Public Limited Companies (includes only Audit Committee and Shareholders/Inveors Grievance Committee): Nil Number of Equity shares held in e Company: Nil Relationship wi oer Director: None Mr. Kamal P. Kanugo Whole-time Director DIN Date of Bir: Date of Appointment: Qualification and Experience: Mr. Kamal P. Kanugo is a B.E. (Indurial Engineering) from U.S.A. He looks after e international marketing and exports of e Company. Directorships held in oer Public Companies (excluding foreign Companies & Section 25 Companies): Nil 39

43 Memberships/Chairmanships of committees of oer Public Limited Companies (includes only Audit Committee and Shareholders/Inveors Grievance Committee): Nil Number of Equity shares held in e Company: 5,57,752 Relationship wi oer Director: Mr. Kamal P. Kanugo is son of Mr. Prakash C. Kanugo and Broer of Mr. Hemant P. Kanugo none oer Director is related to him Shareholding Pattern as on Particulars No. of Shares % age Promoters, including relatives of Directors and Corporate bodies. 1,17,27, Foreign In. Inveors(FII) 7,39, Non Initutional Inveors:- Oer Bodies Corporate 33,39, Clearing Members 2, Non Resident Indian(NRI) 6, Oers 16,84, Grand Total 1,75,00,

44 Prakash Steelage Ltd. Annual Report Annexure to Corporate Governance Report Declaration of Compliance wi e code of conduct All Board members and Senior Management Personnel have, for e year ended, affirmed compliance wi e Code of Conduct laid down by e Board of Directors in terms of e Liing Agreement entered wi e Stock Exchanges. Sd/- Prakash C. Kanugo Chairman & Managing Director DIN : Mumbai, 13 Augu, 2014 Practicing Company Secretary Certificate on compliance of Corporate Governance as ipulated in Clause 49 of e liing Agreement To The Members of Prakash Steelage Limited We have read e Report of Directors on Corporate Governance and have examined e relevant records relating to compliance of condition of Corporate Governance by Prakash Steelage Limited for e year ended on, as ipulated in Clause-49 of e Liing Agreement executed by e Company wi e Stock Exchanges. The Compliance of conditions of Corporate Governance is e responsibility of e management. Our examination was limited to e procedures and implementation ereof, adopted by e Company for ensuring e compliance of e condition of e Corporate Governance. It is neier an audit nor an expression of opinion on e financial atement of e Company. In our opinion and to e be of our information and according to e explanation given to us, we certify at e Company has complied wi e conditions of Corporate Governance as ipulated in e above mentioned Liing Agreement. We furer ate at such compliance is neier an assurance to e future viability of e Company nor e efficiency of effectiveness wi which e management has conducted e affairs of e Company. For S. ANANTHA & Co., Company Secretaries Sd/- S. Anana Rama Subramanian Proprietor FCS 4443, C.P. NO.1925 Place: Mumbai Date: 13 Augu,

45 Certification by e Chief Executive Officer (CEO) and Chief Financial Officer (CFO) on financial atements of e Company We, Prakash C. Kanugo, Chairman & Managing Director and Ashok M. Se, Whole-time Director Finance and CFO, certify at: 1. We have reviewed e financial atements and e cash flow atement for e year ended and at to e be of our knowledge and belief: These atements do not contain any materially untrue atement nor omit any material fact nor contain atements at might be misleading; and These atements present true and fair view of e Company's affairs and are in compliance wi e exiing accounting andards, applicable laws and regulations. 2. There are, to e be of our knowledge and belief, no transactions entered into by e Company during e year, which are fraudulent, illegal or in violation of e Company's code of conduct; 3. We accept responsibility for eablishing and maintaining internal controls, we have evaluated e effectiveness of e internal control syems of e Company and we have disclosed to e auditors and e Audit Committee, deficiencies in e design or operation of internal controls, if any, of which we are aware and e eps at we have taken or propose to take to rectify e identified deficiencies; and 4. That we have informed e auditors and e Audit Committee of: i. Significant changes in internal control during e year; ii. Significant changes in accounting policies during e year and at e same have been disclosed in e notes to e financial atements; and iii. Inances of significant fraud of which we have become aware and e involvement erein, if any, of e management or an employee having a significant role in e Company's internal control syem. Sd/- Prakash C. Kanugo Chairman & Managing Director DIN : Sd/- Ashok M. Se Executive Director Finance & Chief Financial Officer DIN : Mumbai, 29 May,

46 Prakash Steelage Ltd. Annual Report Independent Auditors' Report To e Members of Prakash Steelage Limited Report on e Financial Statements We have audited e accompanying financial atements of Prakash Steelage Limited ( e Company ), which comprise e Balance Sheet as at March 31, 2014, e Statement of Profit and Loss and Cash Flow Statement for e year en ended and a summary of significant accounting policies and oer explanatory information. Management's Responsibility for e Financial Statements Management is responsible for e preparation of ese financial atements at give a true and fair view of e financial position, financial performance and cash flows of e Company in accordance wi e Accounting Standards referred to in sub-section (3C) of section 211 of e Companies Act, 1956 ( e Act )read wi e General Circular 15/2013 dated 13 September, 2013 of e Miniry of Corporate Affairs in respect of Section 133 of e Companies Act, 2013 and in accordance wi e accounting principles generally accepted in India. This responsibility includes e design, implementation and maintenance of internal control relevant to e preparation and presentation of e financial atements at give a true and fair view and are free from material misatement, wheer due to fraud or error. Auditors' Responsibility Our responsibility is to express an opinion on ese financial atements based on our audit. We conducted our audit in accordance wi e Standards on Auditing issued by e Initute of Chartered Accountants of India. Those Standards require at we comply wi eical requirements and plan and perform e audit to obtain reasonable assurance about wheer e financial atements are free from material misatement. An audit involves performing procedures to obtain audit evidence about e amounts and disclosures in e financial atements. The procedures selected depend on e auditor's judgment, including e assessment of e risks of material misatement of e financial atements, wheer due to fraud or error. In making ose risk assessments, e auditor considers internal control relevant to e Company's preparation and fair presentation of e financial atements in order to design audit procedures at are appropriate in e circumances, but not for e purpose of expressing an opinion on e effectiveness of e Company's internal control. An audit also includes evaluating e appropriateness of accounting policies used and e reasonableness of e accounting eimates made by management, as well as evaluating e overall presentation of e financial atements. We believe at e audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion and to e be of our information and according to e explanations given to us, e financial atements give e information required by e Act in e manner so required and give a true and fair view in conformity wi e accounting principles generally accepted in India: a) In e case of e Balance Sheet, of e ate of affairs of e Company as at March 31, 2014; b) In e case of e Statement of Profit and Loss, of e profit for e year ended on at date; and c) In e case of e Cash Flow Statement, of e cash flows for e year ended on at date. Report on Oer Legal and Regulatory Requirements 1. As required by e Companies (Auditor's Report) Order, 2003 ( e Order ), as amended, issued by e Central Government of India in terms of sub-section (4A) of section 227 of e Act, we give in e Annexure a atement on e matters specified in paragraphs 4 and 5 of e Order. 2. As required by section 227(3) of e Act, we report at: a) We have obtained all e information and explanations which to e be of our knowledge and belief were necessary for e purpose of our audit; 43

47 b) In our opinion proper books of account as required by law have been kept by e Company so far as appears from our examination of ose books; c) The Balance Sheet, e Statement of Profit and Loss and e Cash Flow Statement dealt wi by is Report are in agreement wi e books of account; d) In our opinion, e Balance Sheet, e Statement of Profit and Loss and e Cash Flow Statement comply wi e Accounting Standards referred to in subsection (3C) of section 211 of e Act read wi e General Circular 15/2013 dated 13 September, 2013 of e Miniry of Corporate Affairs in respect of Section 133 of e Companies Act, 2013; e) On e basis of written representations received from e directors as on March 31, 2014, and taken on record by e Board of Directors, none of e directors is disqualified as on March 31, 2014, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of e Act. FOR KHANDELWAL JAIN & CO. CHARTERED ACCOUNTANTS FIRM REGISTRATION NO: W FOR D. C. BOTHRA & CO. CHARTERED ACCOUNTANTS FIRM REGISTRATION NO: W Sd/- NARENDRA JAIN PARTNER MEMBERSHIP NO Sd/- PAWAN BOTHRA PARTNER MEMBERSHIP NO PLACE : MUMBAI TH DATE : 29 MAY,

48 Prakash Steelage Ltd. Annual Report Annexure to e Independent Auditors' Report Annexure referred to in paragraph 1 under e heading of Report on Oer Legal and Regulatory Requirements of Independent Auditors' Report to e members of Prakash Steelage Limited ( e Company ) for e year ended March 31, We report at: i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets. (b) The fixed assets have been physically verified by e management during e year. In our opinion, e frequency of verification of fixed assets by e management, as informed to us, is at reasonable intervals, having regard to e size of e Company and e nature of e assets physically verified and as explained to us no material discrepancies were noticed on such verification. (c) During e year, e Company has not disposed off any subantial part of its fixed assets. ii) (a) Inventory have been physically verified by e management at reasonable intervals. In our opinion, e frequency of verification is reasonable. (b) In our opinion and according to e information and explanations given to us, e procedures of physical verification of inventory followed by e management are generally reasonable and adequate in relation to e size of e Company and e nature of its business. (c) In our opinion and according to e information and explanations given to us, e Company is maintaining proper records of inventory. Discrepancies noticed on verification by management between e physical ocks and e book records were not material and same have been properly dealt wi in e books of account. iii) (a) According to e information and explanations given to us, e Company has not granted any loans, secured or unsecured to any company, firm or oer parties lied in e regier maintained under Section 301 of e Companies Act, Accordingly, provisions of clause 4 (iii) (b) (c) (d) are not applicable to e Company. (b) According to e information and explanations given to us, e Company has taken unsecured loans during e year from a company and a director covered in e regier maintained under Section 301 of e Companies Act, The maximum amount involved during e year was Rs.35,00,00,000 and e year-end balance of loans taken from such parties was Rs. 25,00,00,000. (c) In our opinion, e rate of intere and oer terms and conditions on which such loans have been taken from a company and a director lied in e regier maintained under section 301 of e Companies Act, 1956 are not, prima facie, prejudicial to e intere of e company. (d) According to e information and explanations given to us, repayment of principal and intere ereon were in accordance wi e terms and conditions of loan. iv) In our opinion, and according to e information and explanations given to us, ere is adequate internal control syem commensurate wi e size of e Company and e nature of its business, wi regard to e purchase of inventory, fixed assets and for sale of goods and services. During e course of our audit, we have not observed any continuing failure to correct major weakness in internal control syem. v) (a) In our opinion and according to e information and explanations given to us, e particulars of contracts or arrangements, referred to in section 301 of e Companies Act, 1956, have been entered in e regier required to be maintained under at section. (b) In our opinion and according to e information and explanations given to us, e transactions made in pursuance of contracts or arrangements entered in e regier maintained under Section 301 of e Companies Act, 1956 have been made at prices which are reasonable having regard to prevailing market prices at e relevant time. 45

49 vi) vii) In our opinion and according to information and explanations given to us, no public deposits under e provisions of Section 58A and 58AA of e Companies Act, 1956 and rules framed have been accepted by e Company. According to e information and explanations given to us, no order under e aforesaid sections has been passed by e Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any oer Tribunal on e Company. In our opinion, e Company has an internal audit syem commensurate wi e size and nature of its business. viii) According to information and explanations given to us, e Company has maintained books of account and records required to be maintained pursuant to e rule prescribed by e central government for e maintenance of co records under section 209 (1) (d) of e Companies Act, 1956 and are of e opinion at prima facie e prescribed accounts and records have been made and maintained. The contents of ese accounts and records have not been examined by us. ix) (a) Undisputed Statutory Dues including Employees' Provident Fund, Employees' State Insurance (ESIC), Value Added Tax, Central Sales Tax, Entry Tax, Tax Deducted at Source (TDS), Income Tax, Weal Tax, Service Tax and Profession Tax have generally been regularly deposited wi e appropriate auorities, however, ere have been delays in depositing such dues in some cases. According to e information and explanations given to us, ere were no undisputed atutory dues which have remained outanding as at March 31, 2014 for e period of more an six mons from e date ey became payable. (b) According to e information and explanations given to us, and e records examined by us, dues in respect of Sales-Tax, Income-Tax, Cuoms Duty, Weal Tax, Service Tax, Entry Tax, Value Added Tax, Central Sales Tax, Excise Duty, Cess as at March 31, 2014 at have not been deposited wi e appropriate auority on account of any disputes and e forum where e dispute is pending are as under:- S r. No. Name of e Statute Nature of e Dues Period to which e amount relates Amount (Rs.) Forum where dispute is pending 1 Bombay Sales Sales Tax ,202/- Dy. Comm. Sales Tax Tax Act (Appeal) IV, Mumbai 2 Bombay Sales Sales Tax ,317/- Dy. Comm. Sales Tax Tax Act (Appeal) IV, Mumbai 3 Central Sales Central ,85,360/- Dy. Comm. Sales Tax Tax Act Sales Tax (Appeal) IV, Mumbai 4 Central Sales Central ,53,968/- Joint Comm. Sales Tax Tax Act, 1958 Sales Tax (Appeal) IV, Mumbai 5 Maharashtra Sales Tax ,07,56,527/- Joint Comm. Sales Tax VAT Act, 2002 (Appeal) IV, Mumbai x) The Company has no accumulated losses at e end of e financial year and has not incurred cash loss in e current financial year or in e immediately preceding financial year. xi) xii) In our opinion and according to e information and explanations given to us, e Company has not defaulted in repayment of dues to a financial initution or bank. Based on e information and explanations given to us, e Company has not granted any loans and/or advances on e basis of security by way of pledge of shares, debentures and oer securities. xiii) The Company is not a chit fund or nidhi / mutual benefit fund / society. xiv) In our opinion and according to e information and explanations given to us, e Company has not done dealing or trading in shares, securities, debentures and oer invements during e year under audit. xv) In our opinion and according to e information and explanations given to us, e Company has not given any guarantees for loans taken by oers from banks or financial initutions. 46

50 Prakash Steelage Ltd. Annual Report xvi) In our opinion and according to e information and explanations given to us, e term loans raised during e year have been applied for e purpose for which ey were raised. xvii) According to e information and explanations given to us and on an examination of e Balance Sheet of e Company, we report at, on an overall basis, funds raised on short-term basis have, prima facie, not been used during e year for long-term invement. xviii) The Company has not made any preferential allotment of shares during e year. xix) In our opinion and according to e information and explanations given to us, e Company has not issued any debentures during e year or in earlier years. xx) The Company has not raised any money by public issue during e year. xxi) To e be of our knowledge and belief and according to e information and explanations given to us, no fraud on or by e Company has been noticed or reported during e year. FOR KHANDELWAL JAIN & CO. CHARTERED ACCOUNTANTS FIRM REGISTRATION NO: W FOR D. C. BOTHRA & CO. CHARTERED ACCOUNTANTS FIRM REGISTRATION NO: W Sd/- NARENDRA JAIN PARTNER MEMBERSHIP NO Sd/- PAWAN BOTHRA PARTNER MEMBERSHIP NO PLACE : MUMBAI TH DATE : 29 MAY,

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52 Prakash Steelage Ltd. Annual Report

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54 Prakash Steelage Ltd. Annual Report

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56 Prakash Steelage Ltd. Annual Report

57 Auorised 20,000,000 (P.Y. 20,000,000) Equity Shares of Rs. 10/- each 200,000, ,000,000 Issued Subscribed & Paid up 17,500,039 (P.Y. 17,500,039) Equity Shares of Rs. 10/- each 175,000, ,000,390 fully paid-up Total 175,000, ,000,390 a Reconciliation of e shares outanding at e beginning and at e end of e reporting period Equity Shares Nos. Nos. At e beginning of e period 17,500, ,000,390 17,500, ,000,390 Issued during e year Outanding at e end of e period 17,500, ,000,390 17,500, ,000,390 b Terms/rights attached to equity shares The Company has only one class of equity shares having a par value of Rs.10/- per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend proposed by e Board of Directors is subject to e approval of e shareholders in e ensuing Annual General Meeting. The Board of Directors, in eir meeting on 29 May, 2014, proposed a final dividend of Re 1/- per equity share. The proposal is subject to e approval of shareholders at e Annual General Meeting to be held on 13 Augu, The total dividend appropriation for e year ended 31 March, 2014 amounted to Rs.1,75,00,039/- excluding corporate dividend tax of Rs. 29,74,132/-. During e year ended, e amount of final dividend recognized as diributions to equity shareholders was Re.1/- per equity share. The total dividend appropriation for e year ended amounted to Rs.1,75,00,039/- excluding corporate dividend tax of Rs. 29,74,132/- In e event of liquidation of e Company, e holders of equity shares will be entitled to receive remaining assets of e Company, after diribution of all preferential amounts. The diribution will be in e proportion to e number of equity shares held by e shareholders. c Details of shareholders holding more an 5% shares in e Company No. of Shares (Rs. 10/- each) % of holding in e class No. of Shares (Rs. 10/- each) % of holding in e class Equity shares of Rs. 10 each fully paid Prakash C. Kanugo 3,783, % 3,783, % AMS Trading and Invement Private Limited 2,876, % 2,876, % Se Iron and Steel Private Limited 1,490, % 1,490, % Balmiki Agencies Private Limited 970, % 970, % 54

58 Prakash Steelage Ltd. Annual Report Reserves & Surplus Share Premium Account As Per La Balance Sheet 671,589, ,589,261 Closing balance 671,589, ,589,261 General Reserve As per La Balance Sheet 225,312, ,312,948 Add : Amount Transferred from surplus balance in e atement of Profit and Loss 50,000,000 50,000,000 Closing balance 275,312, ,312,948 Surplus / ( Deficit ) in e atement of profit and loss As per La Balance Sheet 578,510, ,714,235 Add : Profit for e year 165,492, ,270,211 Less : Appropriations Transfer to General Reserve 50,000,000 50,000,000 Dividend Proposed 17,500,039 17,500,039 Dividend Diribution Tax 2,974,132 2,974,132 Total Appropriations 70,474,171 70,474,171 Net Surplus in e atement of Profit and Loss 673,528, ,510,275 Total Reserve and Surplus 1,620,430,605 1,475,412,484 4 Long Term Borrowings Non Current portion Current Maturities Term Loans Indian rupee loan from Banks (Secured) 138,331,331 43,755,275 50,888,568 17,493,168 Indian rupee loan from Promoter Director (Un Secured) 250,000, Working Capital Loan Indian rupee loan from NBFC (Unsecured) - 10,000,000 10,000,000 17,000,000 Vehicle Loans From Banks (Secured) 2,678,943 1,943, ,495 3,091,150 From NBFC's (Secured) , ,010,274 55,698,819 61,837,063 37,930,602 The above amount includes Secured Borrowings 141,010,274 45,698,819 51,837,063 20,930,602 Unsecured Borrowings 250,000,000 10,000,000 10,000,000 17,000,000 Amount Disclosed under e head "Oer current liabilities " ( Note 8) ,837,063 37,930,602 Net Amount 391,010,274 55,698, a (i) Indian rupee loan from Banks (secured) carries % p.a (previous year 15.50% p.a.). The loan is repayable in 84 monly inallments of Rs 1,460,714/- each along wi intere from e date of loan, viz., 10 July, 2008 e loan is secured by way of mortgage 55

59 of factory land & building, and hypoecation of plant & machinery of Company at Umbergaon. (Fir pari passu charge between Vijaya Bank and Bank of Baroda ) (ii) Indian rupee loan from Banks (secured) carries intere 13% p.a. to % p.a. The loan is repayable after 15 mons from e date of fir disburshment (date: ) in 59 monly equal inallments of Rs 4,170,000/- and la inallment will be of Rs. 3,970,000/- along wi intere from e date of loan, Intere and oer charges to be paid as and when debited. This loan is secured by way of mortgage of factory land & building, and hypoecation of plant & machinery of Company at Umbergaon. (Fir pari passu charge wi Vijaya Bank and Bank of Baroda). Also second pari passu charge on current assets of e Company including ocks and book debts. b Indian rupee loan from Promoter Director (Unsecured) taken from a proprietory concern of a Promoter Director, carries 9.00%. The loan is repayable after e expiry of 5 years wi an option to be paid fully or in trenches. The intere is payable on yearly basis. The said loan has been intorduced as per e loan sanction terms & conditions of Vijaya bank & Bank of India.and shall remain in e business during e currency of e loan from bo e banks. c Working Capital loan from NBFC (unsecured) taken on 26 February, 2013 for a period of 24 mons carrying intere rate of 10.75% p.a. (previous year 10.75% p.a.) flat on Rs 30,000,000 /-. The same is repayable in 12 monly inallments of Rs 1,822,500/- in e fir year of e loan & inallments of Rs 1,215,000/- for e remaining period of e loan. The loan has been sanctioned again collateral of Rs. 6,000,000 wi e lender along wi po dated cheques for Principal and Intere payable ereon and personal guarantee of ree directors. d i) ii) Vehicle loans from Banks (secured) carries intere in e range of 7.50% p.a. to 12.50% p.a. (previous year 7.50% p.a. to 10.75% p..a.) All e loans are repayable in monly inallments from e date of disbursement. These loans are secured again hypoecation of respective Vehicles and Po Dated Cheques for Principal & Intere payable ereon. Vehicle loan from NBFC (secured) outanding as at end of e previous year carried intere of approximately 11.50% p.a. The loan was repayable in 34 monly inallments from e date of disbursement and is secured again hypoecation of respective vehicle and Po Dated Cheques for Principal & Intere payable ereon. 5 Deferred Tax Liabilities (Net) Deferred Tax Liability Fixed assets : Tax impact of difference between carrying amount of fixed assets in e financial atements and e income tax return 79,335,096 72,577,096 Gross Deferred Tax Liability 79,335,096 72,577,096 Deferred tax assets Outanding Leave encashment, Gratuity and Bonus 3,166,826 3,684,719 Provision for doubtful debts 1,845, ,931 Preliminary Expenses u/s. 35D of e Income Tax Act, ,945,727 3,595,943 Gross Deferred Tax Assets 6,957,907 7,623,593 Deferred Tax Liabilities (Net) 72,377,189 64,953,503 56

60 Prakash Steelage Ltd. Annual Report Provisions Long - Term Short - Term (a) Provision for employee benefits Provision for Leave Encashment 1,067,949 1,817, , ,398 Provision for Gratuity 5,227,560 6,014, , ,370 6,295,509 7,832, , ,768 (b) Oer Provisions Proposed Dividend ,500,039 17,500,039 Dividend Diribution Tax - - 2,974,132 2,974,132 Income Tax (Net of Advance Taxes) ,901,347 20,275,153 Fringe Benefit Tax (Net of Advance Taxes) , ,000 Weal Tax ( Net of Advance Taxes ) ,700 72, ,539,218 40,922,092 6,295,509 7,832,074 70,967,685 41,373,860 7 Short-Term Borrowings Cash Credit from Banks (Secured) 1,757,921,182 1,425,902,475 Buyers' Credit from Banks (Secured) 117,444,986 74,121,760 Working Capital loan from Bank (Secured) 60,000,000 50,000,000 Working Capital loan from Bank (Unsecured) - 25,000,000 Export Packing Credit from Banks (Secured) 81,206, ,693,824 Bill Discounting from Banks (Secured) - 26,243,635 Bill Discounting from Bank (Unsecured) 31,414,974 7,944,569 Bill Discounting from a NBFC (Unsecured) 140,798, ,399,743 Loan from NBFC (Unsecured) - 50,000,000 2,188,785,810 1,959,306,007 The above amount includes Secured Borrowings 2,016,572,455 1,724,961,695 Unsecured Borrowings 172,213, ,344,312 Total 2,188,785,810 1,959,306,007 a Cash Credit from Banks (Secured) and Working Capital Loan from Bank (Secured) are repayable on demand and carries 12.20% to 12.85% p.a., (previous year 12.75% to 16% p.a.), Buyers Credit (Secured) represents Foreign Currency Buyers Credit from various Banks which carries intere ranging from 1 % to 5.25 % p.a. (previous year 2% to 5.25% p.a.) having a tenor of maximum upto 180 days., Export Packing Credit from Banks (Secured) represents export packing Credit facility from various banks. The tenor of e facility is maximum upto 180 days and e rate of intere (Foreign Currency facility) is Margin + LIBOR i.e. approximately 3.50% to 5 % p.a. (previous year 3.50% to 5% p.a.) and rate of intere ( Indian Currency facility) 13.00% p.a.and Bill Discounting from Banks (Secured) outanding as at e end of e previous year represents bill discounted wi various banks. The tenor of e loan is in e range of days and e rate of intere (local bill discounting) is 10.25% p.a. to 11% p.a. and rate of intere (foreign bill discounting) is in e range of 4 % to 5% p.a., All ese loans are secured by hypoecation of Stocks of Raw Material, Stocks-in-process, Finished Goods,ores and spares (not relating to plant & machinery), bills receivables, book debts & all oer current assets and movables (bo present & future) at Silvassa & Umargaon [Fir Pari Passu charges among Vijaya Bank, Bank of Baroda, Union Bank Of India, Bank of India & DBS Bank Ltd., and e whole 57

61 of e movable plant & machinery including all e spare parts and all oer movable assets such as furniture, fixture, fittings, vehicles & equipments (bo present and future) at Silvassa (Fir Pari Passu charges among e above mentioned banks] and at Umargaon (Second Pari Passu charges among above mentioned banks) and collateral securities in form of fir pari-passu charge on piece and parcel of non agricultural land along wi e building at Silvassa & office premises no 101 & 102 at Islampura Street, at Mumbai, 701, Mahalaxmi Chambers, at Mumbai, Bungalow unit No.C 26, at Swapan Lok Complex, Lonavla, Dirict Pune, Plot at Ohm Indurial Infraructure Park, Umbergaon, Dirict Valsad, State Gujrat and two residential Plot No.B 30 & C 20, at Sheetal Township project, Umbergaon, Dirict : Valsad, State Gujrat belonging to ree Directors and eir relatives and personal guarantee of four directos & eir relatives. b Working capital loan from Bank (Unsecured) outanding as at e end of e previous year was availed for meeting working capital requirements of e company. The maximum tenor of e loan is 180 days and rollover was permitted after cooling period 3 days. The rate of intere is 12.75% to 13.25% p.a. The intere is payable monly at e end of each mon / at e end of closure of e loan transaction. Bill Discounting from Bank (Unsecured) represents export bills discounted wi local banks. The tenor of e loan is in e range of 50 to 120 days and e rate of intere is approximately 10% to 10.70% p.a. (previous year 10% to 10.70% p.a.) Bill Discounting from a NBFC (Unsecured) is availed from finance companies and e tenor of e loan is 90 to 120 days and e rate of intere is 14.25% to 16.75% p.a. (previous year 14.25% p.a.). c Loan from NBFC (unsecured) outanding as at e end of e previous year taken for 12 mons on September 28, 2012 carries STLR (floating) less 1.75% which is 14.75% p.a. payable on a monly basis is availed from a finance company. The principal amount is repayable in 3 monly equal inallments arting after 9 mons of e availment of loan. The same has been sanctioned again e pledge of unecumbered shares of e company held by a Promoter company to maintain e security cover equal to 2.50 times at all times during e tenure of e loan and irrevocable and unconditional, personal guarantee of two directors & corporate guarantee by e said promoter company. 8 Oer Current Liabilities Trade payables (including acceptances) (refer note 29 for details of dues to micro and small enterprises) 1,585,359,322 1,350,251,532 Oer Liabilities Current maturities of Long Term Borrowings ( Note 4 ) 61,837,063 37,930,602 Liability for expenses (refer note 29 for details of dues to micro and small enterprises) 58,770,478 68,109,919 Creditors for capital expenditure 5,061,970 40,801,447 Advance received from cuomer 113,639,006 46,271,353 Intere Accrued but not due on Loans 5,096,344 2,580,510 Unpaid Dividend 63,323 45,773 Security deposit from employees 177, ,100 Oers Deferred Discount on Forward Contracts - 1,453,887 Statutory dues 15,879,469 19,955, ,524, ,326,363 1,845,884,075 1,567,577,895 58

62 Prakash Steelage Ltd. Annual Report ST NOTES TO FINANCIAL STATEMENT FOR THE YEAR ENDED 31 MARCH, 2014 Note 9 : FIXED ASSETS Sr. No. Assets As On 01/04/2013 Rs. GROSS BLOCK Addition Rs. Deductions/ Adjuments Rs. As On 31/03/2014 Rs. As On 01/04/2013 Rs. DEPRECIATION/ AMORTISATION Dep. For e year Charged To P& L A/c Rs. Deductions/ Adjuments Rs. Upto 31/03/2014 Rs. As On 31/03/2014 Rs. NET BLOCK As On 31/03/2013 Rs. Tangible assets 1 Factory Land 17,127,862 4,334,204 8,818,164 12,643, ,643,902 17,127,862 2 Factory Building 294,460,514 35,252, ,713,161 41,287,781 9,529,909-50,817, ,895, ,172,733 3 Office Building 731, , ,191 15, , , ,849 4 Plant & Machinery 565,173, ,588,774 11,681, ,080, ,990,842 57,692,836 5,006, ,677, ,402, ,182,391 5 Electrical & Telephone Inallation & office equipment 15,778, ,114-16,577,139 6,438, ,409-7,219,434 9,357,705 9,340,000 6 Computers 13,512, ,367-13,622,382 10,309,185 1,402,396-11,711,581 1,910,801 3,202,830 7 Furniture & Fixtures 25,516, ,063-25,724,247 9,313,415 1,533,438-10,846,853 14,877,394 16,202,769 8 Vehicles 47,682,876 2,351,230 3,275,227 46,758,879 28,136,666 5,164,798 2,389,439 30,912,025 15,846,854 19,546,210 9 Live Stock 22, , ,000 22,000 Intangible assets 980,003, ,644,399 23,775,227 1,165,872, ,897,106 76,120,278 7,395, ,621, ,251, ,106,644 Computer Software 5,277,375 20,069,617-25,346,992 2,368,725 4,746,459-7,115,184 18,231,808 2,908,650 Total Current Year 985,281, ,714,016 23,775,227 1,191,219, ,265,831 80,866,737 7,395, ,736, ,483, ,015,294 Total Previous Year 976,182,817 11,359,132 2,260, ,281, ,531,154 72,372,145 1,637, ,265, ,015, ,651,663 Notes: (1) During e year, e company has reviewed its fixed assets for impairment loss as required by Accounting Standards 28 Impairment of Assets. In e opinion of management no provision for impairment loss is considered necessary. 59

63 NOTE 10: NON CURRENT INVESTMENTS (VALUED AT COST UNLESS STATED OTHERWISE) Maturity Date Number of Units Face Value Per Unit Face Value As at (Rs.) Number of Units As at (Rs.) I INVESTMENTS IN EQUITY SHARES UNQUOTED EQUITY SHARES IN SUBSIDIARY COMPANY Pioneer Stainless & Alloys F.Z.C. 100 USD 504 USD ,035, Total ( I ) 3,035,469 - II MUTUAL FUNDS QUOTED FIXED MATURITY PLAN Union KBC Capital Protection Oriented Fund - Series 5 -Regular Plan - Grow 6-Feb ,000 Rs 10 Rs ,000, Total ( II ) 1,000,000 - Grand Total (I+II) 4,035,469 - Notes As at (Rs.) As at (Rs.) (a) Aggregate Book Value - Quoted Invements 1,000,000 - (b) Aggregate Market Value of Quoted Invements 1,073,180 - (c) Aggregate Book Value - Unquoted Invements 3,035,469-60

64 Prakash Steelage Ltd. Annual Report Loans and Advances Long - Term Short - Term Capital Advances Secured, considered good Unsecured, considered good 39,613,681 21,044, (A) 39,613,681 21,044, Security Deposit Secured, considered good Unsecured, considered good - Security Deposit to Related Party 55,000,000 55,000, Oers 4,451,228 4,375,128 1,823,295 2,535,886 (B) 59,451,228 59,375,128 1,823,295 2,535,886 Loans & Advances to related parties Pioneer Stainless & Alloys F. Z. C ,134 - (C) ,134 - Advances recoverable in cash or kind Secured, considered good Unsecured, considered good ,064, ,138,003 (D) ,064, ,138,003 Oer loans and advances (Unsecured, considered good) Advance income tax (net of provision for taxation) Balance wi central excise auority ,057,837 32,853,989 Collateral / Margin Money - 6,000,000 30,954,882 26,143,267 Deferred Premium Prepaid expenses - - 4,876,784 5,159,070 Loans and advances to employees - - 1,005,993 1,068,443 Advance income tax (net of provision for taxation) 436, , Balances wi atutory / Government auorities 777,663 1,012,514 7,519,548 2,946,546 (E) 1,214,109 7,448,960 91,415,044 68,171,315 (A+B+C+D+E) 100,279,018 87,868, ,492, ,845,204 Collateral / Margin money deposits given as security : The lender has unconditional lien in respect of e collateral of Rs.60,00,000/- and intere accruing ereon and has unconditional right to adju ese monies to set off compensation arising out of late remittance of monly inallment due in respect of Indian rupee Working Capital loan of Rs 3,00,00,000 /-. Margin money deposits wi a carrying amount of Rs. 24,954,882/- (Previous year Rs. 26,143,267/-) are given again e discounting of bills of exchange. 61

65 Long - Term Short - Term Security deposits include Dues from Directors & eir relatives (refer note 26) 55,000,000 55,000, Loans to employee include Dues from Officers 890, ,555 Dues from Workers 115, , Oer Assets Non - Current Current Unsecured, considered good unless ated oerwise Non current bank balances (note 15) 7,898,113 24,713, Intere Accrued on Bank deposits 432,788 1,127,222 4,199,436 2,924,180 Intere Accrued on oer deposits - 45, , ,098 Export Benefit Incentive ,688,508 60,166,959 8,330,901 25,885,497 56,476,917 63,437, Inventories (Valued at co or market value whichever is lower, as taken, valued and certified by management ) Raw materials and components (Includes in transit Rs NIL /- (P.Y. Rs.207,84,355/-) (Refer Note (1) (f) ) 239,490, ,424,577 Work in progress (Refer note (1) (f) ) 165,071, ,146,155 Finished goods (Refer Note (1) (f) ) 81,986, ,759,837 Land for Indurial Park (Refer Note 39) 8,818,164 - Traded goods (Includes in transit Rs.9,205,310/- (P.Y. Rs 2,148,914/-) ( Refer Note (1) (f) ) 1,515,365, ,877,712 Stores and spares 43,846,270 46,745,868 2,054,577,596 1,876,954,149 62

66 Prakash Steelage Ltd. Annual Report Trade Receivable Non - Current Current Unsecured, considered good unless ated oerwise Outanding for a period exceeding six mons from e date ey are due for payment Secured, considered good Unsecured, considered good ,064, ,774,480 Doubtful - - 5,429,109 1,008, ,493, ,783,397 Provision for doubtful debts - - (5,429,109) (1,008,917) (A) ,064, ,774,480 Oer debts Secured, considered good Unsecured, considered good - - 2,527,734,211 1,818,958,828 (B) - - 2,527,734,211 1,818,958,828 (A+B) - - 2,791,798,245 2,019,733, Cash and Bank Balances Non - Current Current Cash and cash equivalents Currency in hand , ,812 Cash on hand - - 2,157,703 2,239,239 Balances wi banks: On current accounts ,638,648 43,494,350 Earmarked balance wi Bank (Unpaid Dividend) ,323 45,773 Cheques/ drafts in hand ,000,000 - Total Cash and cash equivalents ,100,741 46,552,174 Oer bank balances Margin money deposit 7,898,113 24,713,004 90,357,856 98,664,784 7,898,113 24,713,004 90,357,856 98,664,784 Amount disclosed under non-current assets (Note - 12) 7,898,113 24,713, ,458, ,216,958 Margin money deposits given as security : Fixed deposits amounting to Rs.98,255,969/- (Previous year Rs.123,377,788/-) have been kept wi e banks as a margin money for non fund based facilities. 63

67 16 Revenue From Operations Operating revenue Sale of Products Finished goods 2,822,281,469 2,920,299,620 Traded goods 6,741,103,541 5,204,290,577 Oer operating revenue Export Incentives 58,213,992 45,110,450 Profit on Consignment Sales 75,468 - Revenue from operations (Gross) 9,621,674,470 8,169,700,647 Less : Excise duty # 179,495, ,547,367 Revenue from operations (Net) 9,442,178,893 7,932,153,280 # Excise duty on sales amounting to Rs.179,495,577 ( : Rs.237,547,367) has been reduced from sales in e Statement of Profit and Loss and excise duty on (increase) / decrease in ock amounting to Rs.( 28,957,614), ( : Rs.26,862,699) has been considered as (income) / expense in note 22 of financial atements. Details of product sold Finished goods sold S. S. Pipe / Tubes 2,767,647,151 2,812,159,323 S. S. Scrap 54,634, ,140,297 2,822,281,469 2,920,299,620 Traded goods sold S. S. Pipe / Tubes 1,046,411,843 1,851,896,722 S. S. Sheet / Coil /Plate 5,694,691,698 3,352,393,855 6,741,103,541 5,204,290,577 9,563,385,010 8,124,590, Oer Income Intere Income on -Bank Deposits 8,779,098 9,802,359 -Loans & Advances 973,271 68,822,385 -Receivables 27,855,709 5,349,171 Profit on Sale of fixed assets 19,508 - Sundry Balance write back (net) (Refer Note No.32) - 9,284,930 Excess provision written back - 2,425,395 Oer Income - 14,242 Discount on Forward Contracts (net of premium) 3,548, ,170 41,176,556 96,445,652 64

68 Prakash Steelage Ltd. Annual Report Raw Material Consumed Opening Stock 397,424, ,982,857 Add : Purchases 1,765,553,229 2,184,207,073 2,162,977,806 2,781,189,930 Less : Closing Stock 239,490, ,424,577 1,923,486,965 2,383,765,353 Details of raw material and components consumed S. S. Strip / Sheet / Coil / Plate 945,189,820 1,333,189,831 S. S. Round Bar 199,354, ,523,268 S.S. Pipe 778,942, ,052,254 1,923,486,965 2,383,765,353 Details of inventory Raw materials and components S. S. Strip / Sheet / Coil / Plate 83,587, ,704,989 S. S. Round Bar 14,642,362 40,397,121 S.S. Pipe 141,260, ,322, ,490, ,424, Increase / (decrease) in Stock Opening Stock : Traded Goods 970,877, ,287,271 Work in Process 115,146, ,466,137 Finished Goods 346,759, ,275,976 1,432,783, ,029,384 Closing Stock : Land for Indurial Park (Refer Note 39) 8,818,164 - Traded Goods 1,515,365, ,877,712 Work in Process 165,071, ,146,155 Finished Goods 81,986, ,759,837 1,771,240,485 1,432,783,704 (338,456,781) (631,754,320) Details of purchase of traded goods S. S. Pipe / Tubes 1,033,806,802 1,717,663,747 S. S. Sheet / Coil /Plate 5,715,444,528 3,438,017,046 6,749,251,330 5,155,680,793 65

69 Details of inventory Land for Indurial Park (Refer Note 39) 8,818,164-8,818,164 - Traded goods S. S. Pipe / Tubes 219,627, ,495,292 S. S. Sheet / Coil /Plate 1,295,737, ,382,420 1,515,365, ,877,712 Work-in-progress S. S. Strip / Sheet / Coil / Plate 44,154,226 56,035,310 S. S. Round Bar - 12,403,723 S.S. Pipe 120,916,795 46,707, ,071, ,146,155 Finished goods S. S. Pipe / Tubes 79,166, ,717,036 S. S. Scrap 2,819,878 5,042,801 81,986, ,759, Employee Benefit Expenses Salaries, Bonus and Oer Benefits 14,763,352 15,834,783 Contribution to Provident and Oer Funds 3,500,521 3,902,078 Wages, Bonus & Oer Benefits 72,355,054 75,929,769 Remuneration to Directors 3,780,000 3,060,000 Staff welfare Expenses 5,552,167 6,931,485 99,951, ,658, Finance Cos Intere on Term Loan 14,158,987 11,471,753 Intere on Cash Credit & Oer Facilities 248,874, ,910,739 Intere on Car Loans 466, ,595 Intere On unsecured loans 13,685,164 27,934,238 Oer Intere 30,802,592 33,093, ,987, ,966,958 Bank Commission & Oer Finance Charges 45,222,559 17,542, ,210, ,509, ,210, ,509,373 66

70 Prakash Steelage Ltd. Annual Report Oer Expenses Manufacturing & Oer Expenses Teing, Cutting & Job Work Charges 33,647,917 44,361,252 Power, Fuel & Water Charges 30,225,554 30,987,866 Insurance (Factory) 743, ,299 Repairs & Maintenance (Factory) 10,160,141 12,050,171 Liquidated damages/late delivery charges paid 9,601,972 14,397,504 Excise Duty on Closing Stock (28,957,614) 26,862,699 (A) 55,421, ,549,791 Adminirative, Selling Expenses & Oer Expenses Fluctuation in Foreign Currency 29,071,744 16,783,301 Advertisement Expenses 4,286,592 2,839,597 Sales Promotion Expenses 5,739,816 8,716,700 Discount & Rebate 289,288 25,356 Donation 236, ,602 Export Freight 49,596,456 37,881,316 Legal and Professional Expenses 15,480,496 12,815,722 Packing,Transport, Coolie & Cartage 27,896,229 29,807,296 Printing & Stationary 1,597,964 2,424,802 Rates & Taxes 4,549,316 1,219,133 Regiration & Tender Fees 53,538 60,378 Rent 2,585,936 2,347,709 Electricity Charges 1,437,872 1,761,695 Repairs & Maintenance 3,003,611 1,302,280 Security Charges 752,478 1,598,071 Auditors Remuneration 707, ,719 Insurance 1,613, ,402 Director Sitting Fees 147,000 90,000 Sundry Expenses 1,805,477 2,753,586 Telephone,Poage & Telegram 3,592,317 4,259,041 Travelling & Conveyance 13,387,336 11,459,442 Vehicle Maintenance & Insurance 8,680,867 8,676,551 Brokerage & Commission 10,000 8,500 Sundry Balances Written off (net) (Refer Note No.32) 31,326,734 - Loss on Sale/Theft of Fixed Assets 5,109,670 81,420 Training & Recruitment Expenses 121,102 1,701,821 Provision for doubtful debts 4,420,192 1,008,917 Bad Debts written off 3,779,426 3,232,177 Loss on Consignment Sales - 5,612 (B) 221,278, ,160,146 (A+B) 276,699, ,709,937 67

71 Note: Payment to auditors As auditor: Audit fee 600, ,000 In oer capacity: Taxation matters 40,000 50,000 Reimbursement of expenses 37,140 26,530 Oer services - 6,189 Certification 30,000 23, , , Earnings Per Share (EPS) In accordance wi Accounting Standard 20 - Earning per Share notified under Companies (Accounting Standard) Rules, 2006, (as amended) and relevant provisions of Companies Act, 1956 e required disclosure is given below: The following reflects e profit/(loss) and share data used in e basic and diluted EPS computations : Net profit / (loss) attributable to Shareholders (Rs.) 165,492, ,270,211 Weighted average number of equity shares issued (Nos.) for basic EPS 17,500,039 17,500,039 Basic earnings per share of Rs. 10/- each () The Company does not have any potential dilutive equity shares. Consequently, e basic and diluted earnings per share remain e same. 24 Disclosure under Revised Accounting Standard 15 on Employee Benefits: Consequent to Accounting Standard 15 Employee Benefits (Revised 2005) becoming effective, e Company has made e provision for Defined Contribution Plan and Defined Benefit Plan. Defined Contribution Plan During e year, e Company has recognized Rs. 3,500,521/- (Previous Year Rs. 3,902,078/-) towards Provident Fund and Employees, State Insurance Corporation as Defined Contribution Plan Obligation. Defined Benefit Plan Gratuity & Leave Encashment Liability is computed on e basis of Gratuity & Leave Encashment payable on retirement, dea and oer widrawals as per e Act and already accrued for pa service, wi e qualifying wages/salaries appropriately projected, as per e Projected Unit Credit Meod. I. Actuarial Assumption Particulars Gratuity Leave Encashment Discount Rate Current 9.10% 8.20% 9.10% 8.20% Rate of Increase in Compensation Levels 6.00% 6.00% 6.00% 6.00% 68

72 Prakash Steelage Ltd. Annual Report II Table Showing Change in Benefit Obligation Particulars Gratuity (Rs.) Leave Encashment (Rs.) Projected Benefit Obligations (PBO) at e beginning of e year 6,361,072 4,755,699 1,922,771 1,464,424 Intere Co 484, , ,306 72,276 Service Co 967,604 1,211, , ,027 Benefits paid (904,773) (802,742) (1,179,545) (1,228,247) Actuarial (gain) / loss on Obligations (1,356,297) 826,483 12,780 1,042,292 Projected Benefit Obligations (PBO) at e end of e Year 5,552,118 6,361,072 1,171,859 1,922,771 III Tables of Fair value of Plan Assets Particulars Gratuity (Rs.) Leave Encashment (Rs.) Fair Value of Plan Assets at e beginning of e year Expected Return on Plan Assets Contributions Benefits paid Gain / (loss) on Plan Assets Fair Value of Plan Assets at e end of e year IV Tables of change in Plan Assets Particulars Gratuity (Rs.) Leave Encashment (Rs.) Fair Value of Plan Assets at e beginning of e year Actual return on Plan Assets Contributions Benefits paid Fair value of Plan Assets at e end of e year V. Funded Status Particulars Gratuity (Rs.) Leave Encashment (Rs.) Funded Status (5,552,118) (6,361,072) 1,171,859 (1,922,771) 69

73 VI The Amounts to be recognised in Balance Sheet and Income Statement and e related analysis Particulars Gratuity (Rs.) Leave Encashment (Rs.) Present Value of Obligation 5,552,118 6,361,072 1,171,859 1,922,771 Fair value of Plan Assets Diff 5,552,118 6,361,072 1,171,859 1,922,771 Unrecognised Actuarial gains (losses) Unrecognised Transitional Liability Liability Recognised in Balance Sheet 5,552,118 6,361,072 1,171,859 1,922,771 VII. Net Periodic Co Particulars Gratuity (Rs.) Leave Encashment (Rs.) Current Service Co 967,604 1,211, , ,027 Intere Co 484, , ,306 72,276 Expected Return on Plan Assets Net Actuarial (gain) loss recognised in e year (1,356,297) 826,483 12,780 1,042,292 Expenses Recognised in e Income Statement 95,819 2,408, ,633 1,686,594 VIII. Movements in e liability recognised in e Balance Sheet Particulars Gratuity (Rs.) Leave Encashment (Rs.) Opening Net Liability 6,361,072 4,755,699 1,922,771 1,464,424 Expense as above 95,819 2,408, ,633 1,686,594 Contributions paid (904,773) (802,742) (1,179,545) (1,228,247) Closing Net Liability 5,552,118 6,361,072 1,171,859 1,922,771 IX Experience Adjuments Particulars Gratuity (Rs.) Leave Encashment (Rs.) Defined benefit obligation 5,552,118 6,361,072 1,171,859 1,922,771 Plan assets Surplus/ (deficit) (5,552,118) (6,361,072) (1,171,859) (1,922,771) Experience adjument on plan liabilities (771,947) 602, , ,911 Acturial Loss/(Gain) due to change in assumptions (584,350) 223,850 (127,372) 70,380 Experience adjument on plan assets Net Acturial Loss/ (Gain) for e year (1,356,297) 826,483 12,780 1,042,291 70

74 Prakash Steelage Ltd. Annual Report Segment Reporting The Company s operations predominantly relates to manufacturing and trading of Stainless Steel Tubes & Pipes, and e revenue from Real Eate segment is yet to commence, ere is no separate reporting segment as per Accounting Standard 17 Segment Reporting notified under e Companies (Accounting Standard) Rules, Related Party Disclosure Disclosure requirement as per Accounting Standard 18 (AS-18) "Related Party Disclosure" notified under Companies (Accounting Standard) Rules, 2006, (as amended) and relevant provisions of Companies Act 1956, Related Parties M/s. Pioneer Stainless & Alloys F.Z.C. (w.e.f. 10 April, 2013) M/s. Sunrise Metal Induries M/s. AMS Trading & Invements Pvt. Ltd. M/s. Se Iron & Steel Pvt. Ltd. M/s. Se Steelage Pvt. Ltd. M/s. Prakash Stainless Pvt. Ltd. M/s. PCK Metal Pvt. Ltd. M/s. Se Carbon & Alloys Pvt. Ltd. M/s. Prakash & Daga Infra Projects Pvt. Ltd. M/s. Prakash C. Kanugo (HUF) M/s. Ashok M. Se (HUF) M/s. Prakash Integrated Hi-Tech Steel And Metal Cluer Private Limited M/s. Chandan and Kanugo Land Developer M/s. Hemant & Co. M/s. Prakash Land Developer M/s. Hemant P Kanugo ( HUF ) M/s Vimal P Kanugo ( HUF ) Shri Prakash C. Kanugo, Chairman & Managing Director Shri Ashok M. Se, Executive Director Shri Hemant P. Kanugo, Whole Time Director Shri Kamal P. Kanugo, Whole Time Director Smt. Babita P. Kanugo Shri Vimal P. Kanugo Shri Kirti P. Kanugo Smt. Ekta H. Kanugo Nature of relationship Subsidiary Company Enterprise of which key management person (Shri Prakash Kanugo) is proprietor Associates / Enterprises over which directors and / or eir relatives has significant influence Key Management Personnel Relatives of Key Management Personnel Note: Related Party Relationships have been identified by e management and relied upon by e Auditors. 71

75 Details of transactions between e Company & related parties & e atus of outanding balances as on. Nature of Transactions Name of Party Associates/ Enterprises over which directors and/or eir relatives has significant influence Unsecured M/s. AMS Trading & 100,000,000 Loans Invements Pvt. Ltd. Taken M/s. Sunrise Metal 250,000,000 Induries Unsecured M/s. AMS Trading & 100,000,000 Loans Invements Pvt. Ltd. Repaid Invement Pioneer Stainless & 3,035,469 in Alloys Fzc subsidiary during e year Loans & Pioneer Stainless & 189,134 Advances to Alloys Fzc subsidiary Intere M/s. Sunrise Metal 2,713,562 Paid Induries Key Management Personnel Remuner- Shri Ashok M. Se 1,050, ,000 ation / Salary Shri Hemant P. Kanugo 750, ,000 Shri Kamal P. Kanugo 630, ,000 Relatives of Key Management Personnel () Shri Kirti P. Kanugo 360, ,000 Shri Prakash C. Kanugo 1,350,000 1,200,000 Shri Vimal P. Kanugo 360, ,000 Rent Paid Shri Prakash C. Kanugo 60,000 60,000 Outanding Balances M/s. Prakash C. 480, ,000 Kanugo (HUF) M/s. Ashok M. Se 360, ,000 (HUF) Smt. Ekta H. Kanugo 480, ,000 Shri Kamal P. Kanugo 660, ,000 Shri Hemant P. Kanugo 108, ,000 Office M/s. Ashok M. Se 11,000,000 11,000,000 Deposit (HUF) Given M/s. Prakash C. 14,000,000 14,000,000 Kanugo (HUF) Smt. Ekta H. Kanugo 14,000,000 14,000,000 Shri Kamal P. Kanugo 11,000,000 11,000,000 Oer Shri Kamal P. Kanugo 5,000,000 5,000,000 Deposit Given 72

76 Prakash Steelage Ltd. Annual Report Details of transactions between e Company & related parties & e atus of outanding balances as on. Nature of Transactions Name of Party Associates/ Enterprises over which directors and/or eir relatives has significant influence Key Management Personnel Relatives of Key Management Personnel () Rent Shri Kamal P. Kanugo , Payable Intere M/s. Sunrise Metal 2,442,206 Payable Induries Unsecured M/s. Sunrise Metal 250,000,000 - Loan Taken Induries Invement Pioneer Stainless & 3,035,469 in subsidiary Alloys Fzc during e year Loans & Pioneer Stainless & 189,134 Advances to Alloys Fzc subsidiary Corporate M/s. AMS Trading and Guarantee invement Pvt. Ltd. & Pledge of equity shares 27 Capital and Oer Commitment AMS Trading and invement Pvt. Ltd had given an irrevocable and unconditional corporate guarantee and pledged 12,64,542 equity shares of e company held by em again e loan of Rs. 5,00,00,000/- taken by e company from NBFC to maintain e security cover equal to 2.50 times at all times during e tenure of e loan. The tenure of e loan was from to During e year, e loan has been fully repaid on (a) Eimated amount of contracts remaining to be executed on Capital Account and not provided for (Net of Advances) 106,967, ,752,296 (b) Oer Commitments - Commitment for invements - 100, Contingent Liabilities Contingent liabilities not provided for in respect of: (a) Guarantees given by e bankers of e company 43,665,328 48,226,175 (b) Sales Tax demands disputed in appeals 15,459, ,879 (c) Letter of Credit - 16,104,672 (d) Gujarat Commercial Tax Penalty - 234,581 (e) Central Sales Tax Liability towards pending declaration forms 29,811,068 7,594,259 (f) Disputed Excise Duty Rebate Claim 551, ,080 (g) Disputed CENVAT Credit 3,599,712 3,599,712 (h) Commitment towards development work for Indurial Park Project 85,000, Details of dues to micro, small and medium enterprises as defined under e MSMED Act, 2006 The Company has amounts due to suppliers under The Micro, Small and Medium Enterprise Development Act, 2006, (MSMED Act) as at. The disclosure pursuant to e said Act is as under: 73

77 Particulars Principal amount remaining unpaid to any supplier as at e year end 887,709 2,669,415 Intere due ereon - 129,306 Amount of intere paid during e year 39,886 - Amount of payments made to e supplier beyond e appointed day during e accounting year - 10,717,061 Amount of intere due and payable for e period of delay in making payment (which have been paid but beyond e appointed day during e year) but wiout adding e intere specified under e Micro Small and Medium Enterprises Development Act, ,446 Amount of intere accrued and remaining unpaid at e end of e accounting year - 852,752 The amount of furer intere remaining due and payable even in e succeeding years, until such date when e intere dues as above are actually paid to e small enterprises for e purpose of disallowance as a deductible expenditure under e MSMED Act ,813 The information has been given in respect of such vendors to e extent ey could be identified as Micro, Small and Medium Enterprises on e basis of information available wi e Company. 30 Some of e balances of Trade Receivables, Deposits, Loans & Advances, Advances received from cuomers, Liability for expenses and Trade Payables are subject to confirmation from e respective parties and consequential reconciliation/adjument arising ere from, if any. The management, however, does not expect any material variation. 31 In e opinion of e Management, Current Assets, Loans & Advances are approximately of e value ated, if realized, in e ordinary course of business. The provision for all known and determined liability is adequate and not in e excess of e amount reasonably required. 32 Sundry balances (net) written off amounting to Rs. 31,326,734/- are net of sundry credit balances written back amounting to Rs.85,65,196/- (in previous year sundry credit balance written back amounting to Rs. 9,284,930/- are net of sundry debit balances written off amounting to Rs.4,653,705/-) 33 Prior period adjument (Net) amounting to Rs 31,090/- (credit) {Previous year Rs. 1,100,001/-(debit)} includes income of Rs. 290,025/- (Previous year Rs. 130,807/- ) and expenses Rs. 258,935/- (Previous year Rs.1,230,808/-). 34 Exceptional item represents gain of Rs.1,75,00,000/- on account of forfeiture of advance due to cancellation of sale contract by e cuomer as per terms of contract. 35 CIF value of Imports Class of Goods Material 799,064, ,821,367 Capital Goods 54,542,337 14,642,037 Stores and Spares 2,479,841 3,178,583 Total 856,086, ,641,987 74

78 Prakash Steelage Ltd. Annual Report Expenditure in Foreign Currency (on accrual basis) Particulars Professional Fees 73,936 1,290,956 Intere on Term Loan - 4,538 Travelling Exp. 4,153,168 4,187,635 Oers 6,242,106 7,574,957 Total 10,469,210 13,058, Earnings in foreign exchange on exports of goods (FOB Value) Particulars Exports of Goods 1,260,723, ,976, Disclosures of derivative inruments The Company has entered into e following derivative inruments. All e forward contracts are accounted for as per Accounting Policies ated in Note 1(i) annexed to Balance Sheet and Statement of Profit and Loss. The Company uses foreign currency forward contracts to hedge its risks associated wi foreign currency fluctuations. The Company does not use forward contracts for speculative purposes. (a) Outanding Short-term Forward Exchange Contracts entered into by e Company on account of receivables : Particulars No. of Contracts 21 7 US Dollar equivalent 2,600,000 1,250,000 INR equivalent 156,259,480 67,986,625 (b) Outanding Short-term Forward Exchange Contracts entered into by e Company on account of payables : Particulars No. of Contracts - - US Dollar equivalent - - INR equivalent - - (c) The un-hedged foreign currency exposure as on 31 March 2014 is given below: Payables as at 31 March 2014 Foreign Currency Amount Local Currency Payables as at 31 March 2013 Foreign Currency Amount Local Currency USD 2,416, ,216,550 2,370, ,910,864 EURO 84,150 6,948,828 18,659 1,297,642 GBP

79 Receivables as at 31 March 2014 Foreign Currency Amount Local Currency Receivables as at 31 March 2013 Foreign Currency Amount Local Currency USD 853,094 51,270,803 1,857, ,017,709 EURO 559,839 46,229, ,235 45,984,798 GBP Company has initiated e development of e Indurial Park Project on its idle land at Palgam (Umbergaon) and accordingly, e Company has converted e Land into Stock-in-Trade at lower of co or net realizable value i.e. at co of Rs. 88,18,164/-. 40 During e year, Company has incorporated on 10 April, 2013, wholly-owned foreign subsidiary viz. Pioneer Stainless & Alloy - F.Z.C. at Ajman, United Arab Emirates for doing trade activities internationally in ferrous and non ferrous metal items. 41 Figures of e previous year have been re-grouped, re-classified and re-arranged, wherever necessary. AS PER OUR REPORT OF EVEN DATE SIGNATURES TO NOTES 1 TO 41 FOR KHANDELWAL JAIN & CO. CHARTERED ACCOUNTANTS FIRM REGISTRATION NO: W FOR D. C. BOTHRA & CO. CHARTERED ACCOUNTANTS FIRM REGISTRATION NO: W FOR AND ON BEHALF OF THE BOARD Sd/- NARENDRA JAIN PARTNER M.NO Sd/- PAWAN BOTHRA PARTNER M.NO Sd/- PRAKASH C. KANUGO CHAIRMAN & MANAGING DIRECTOR Sd/- ASHOK M. SETH EXECUTIVE DIRECTOR & CHIEF FINANCIAL OFFICER PLACE : MUMBAI TH DATE : 29 MAY, 2014 Sd/- PALLAVI P. SHEDGE COMPANY SECRETARY & COMPLIANCE OFFICER 76

80 Prakash Steelage Ltd. Annual Report Independent Auditors' Report To e Board of Directors of Prakash Steelage Limited Report on e Consolidated Financial Statements We have audited e accompanying consolidated financial atements of Prakash Steelage Limited ('e Company') and its subsidiary (collectively referred to as e Group ), which comprise e consolidated balance sheet as at March 31, 2014, e consolidated atement of profit and loss and consolidated cash flows atement for e year en ended, and a summary of significant accounting policies and oer explanatory information. Management's Responsibility for e Consolidated Financial Statements Management is responsible for e preparation of ese consolidated financial atements at give a true and fair view of e consolidated financial position, consolidated financial performance and consolidated cash flows of e Group in accordance wi accounting andards referred to in sub-section (3C) of section 211 of e Companies Act ( e Act ) read wi e General Circular 15/2013 dated 13 September, 2013 of e Miniry of Corporate Affairs in respect of Section 133 of e Companies Act, 2013 and in accordance wi e accounting principles generally accepted in India. This responsibility includes e design, implementation and maintenance of internal control relevant to e preparation and presentation of e consolidated financial atements at give a true and fair view and are free from material misatement, wheer due to fraud or error. Auditor's Responsibility Our responsibility is to express an opinion on ese consolidated financial atements based on our audit. We conducted our audit in accordance wi e Standards on Auditing issued by e Initute of Chartered Accountants of India. Those Standards require at we comply wi eical requirements and plan and perform e audit to obtain reasonable assurance about wheer e consolidated financial atements are free from material misatement. An audit involves performing procedures to obtain audit evidence about e amounts and disclosures in e consolidated financial atements. The procedures selected depend on e auditor's judgment, including e assessment of e risks of material misatement of e consolidated financial atements, wheer due to fraud or error. In making ose risk assessments, e auditor considers internal control relevant to e Company's preparation and presentation of e consolidated financial atements at give a true and fair view in order to design audit procedures at are appropriate in e circumances, but not for e purpose of expressing an opinion on e effectiveness of e Company's internal control. An audit also includes evaluating e appropriateness of accounting policies used and e reasonableness of e accounting eimates made by management, as well as evaluating e overall presentation of e consolidated financial atements. We believe at e audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion and to e be of our information and according to e explanations given to us and based on e consideration of e report of e oer auditors on financial atements of e subsidiary as noted below, e consolidated financial atements give a true and fair view in conformity wi e accounting principles generally accepted in India: a) In e case of e Consolidated Balance Sheet, of e ate of affairs of e Group as at March 31, 2014; b) In e case of e Consolidated Statement of Profit and Loss, of e profit of e Group for e year ended on at date; and c) In e case of e Consolidated Cash Flow Statement, of e cash flows of e Group for e year ended on at date. 77

81 Oer Matter We did not audit e financial atement of a subsidiary, whose financial atement reflects total assets of Rs.5,19,14,628/- as at March 31, 2014 and total revenue of Rs.81,22,17,323/- and net cash inflow amounting to Rs.73,64,089/- for e year ended on at date, as considered in e consolidated financial atements. This financial atements have been audited by oer auditors whose report have been furnished to us by e Management and our opinion, in so far as it relates to e amounts and disclosures included in respect of is subsidiary, is based solely on e report of at oer auditor. Our opinion is not qualified in respect of oer matter. FOR KHANDELWAL JAIN & CO. CHARTERED ACCOUNTANTS FIRM REGISTRATION NO: W FOR D. C. BOTHRA & CO. CHARTERED ACCOUNTANTS FIRM REGISTRATION NO: W Sd/- NARENDRA JAIN PARTNER MEMBERSHIP NO Sd/- PAWAN BOTHRA PARTNER MEMBERSHIP NO PLACE : MUMBAI TH DATE : 29 MAY,

82 Prakash Steelage Ltd. Annual Report ST CONSOLIDATED BALANCE SHEET AS AT Particulars Notes As At Rs. I Equity And Liabilities 1 Shareholders' Funds a Share Capital 2 175,000,390 b Reserves And Surplus 3 1,668,635,978 2 Non-Current Liabilities a Long Term Borrowings 4 391,010,274 b Deferred Tax Liabilities (Net) 5 72,377,189 c Long Term Provisions 6 6,295,509 3 Current Liabilities a Short Term Borrowings 7 2,188,785,810 b Trade Payables 8 1,585,359,322 c Oer Current Liabilities 8 261,009,404 d Short Term Provisions 6 70,967,685 Total 6,419,441,562 II Assets 1 Non-Current Assets a Fixed Assets 9 i Tangible Assets 821,251,328 ii Intangible Assets 18,231,808 b Capital Work In Progress 6,819,292 c Intangible Assets Under Development - d Non-Current Invement 10 1,000,000 e Long Term Loans And Advances ,279,018 f Oer Non-Current Assets 12 8,330,901 2 Current Assets a Inventories 13 2,095,195,745 b Trade Receivables 14 2,791,798,245 c Cash And Bank Balances ,822,686 d Short Term Loans And Advances ,235,622 e Oer Current Assets 12 56,476,917 Total 6,419,441,562 Summary of significant accounting policies 1 The accompanying notes are an integral part of e financial atements AS PER OUR REPORT OF EVEN DATE FOR KHANDELWAL JAIN & CO. CHARTERED ACCOUNTANTS FIRM REGISTRATION NO: W FOR D. C. BOTHRA & CO. CHARTERED ACCOUNTANTS FIRM REGISTRATION NO: W FOR AND ON BEHALF OF THE BOARD Sd/- NARENDRA JAIN PARTNER M.NO PLACE : MUMBAI TH DATE : 29 MAY, 2014 Sd/- PAWAN BOTHRA PARTNER M.NO Sd/- PRAKASH C. KANUGO CHAIRMAN & MANAGING DIRECTOR Sd/- PALLAVI P. SHEDGE COMPANY SECRETARY & COMPLIANCE OFFICER Sd/- ASHOK M. SETH EXECUTIVE DIRECTOR & CHIEF FINANCIAL OFFICER

83 Particulars CONSOLIDATED STATEMENT OF PROFIT AND LOSS ST FOR THE YEAR ENDED 31 MARCH 2014 Notes As At Rs. Income Revenue From Operations ( Gross ) 16 10,433,891,793 Less: Excise Duty 179,495,577 Revenue From Operations ( Net ) 10,254,396,216 Oer Income 17 41,176,556 Total Revenue (I) 10,295,572,772 Expenses Purchases 7,539,173,444 Conversion of land into ock in trade 36 8,818,164 Raw Material Consumed 18 1,923,486,965 Increase / (Decrease) In Stock 19 (379,342,896) Stores & Spares Consumed 93,913,273 Employee Benefit Expenses ,574,447 Finance Cos ,271,823 Depreciation And Amortisation 9 80,866,738 Oer Expenses ,667,046 Total Expenses (II) 10,011,429,003 Profit / (Loss) Before Exceptional Item And Prior Period Adjuments 284,143,769 Prior Period Adjuments 33 31,090 Exceptional Item 34 17,500,000 Profit/(Loss) Before Tax 301,674,859 Tax Expenses Current Tax 80,091,000 Deferred Tax 7,423,686 Income Tax Relating To Earlier Years 138,622 Total Tax Expenses 87,653,308 Profit/(Loss) After Tax 214,021,550 Earnings Per Equity Share (Basic And Diluted) Summary of significant accounting policies 1 The accompanying notes are an integral part of e financial atements AS PER OUR REPORT OF EVEN DATE FOR KHANDELWAL JAIN & CO. CHARTERED ACCOUNTANTS FIRM REGISTRATION NO: W FOR D. C. BOTHRA & CO. CHARTERED ACCOUNTANTS FIRM REGISTRATION NO: W FOR AND ON BEHALF OF THE BOARD Sd/- NARENDRA JAIN PARTNER M.NO Sd/- PAWAN BOTHRA PARTNER M.NO Sd/- PRAKASH C. KANUGO CHAIRMAN & MANAGING DIRECTOR Sd/- ASHOK M. SETH EXECUTIVE DIRECTOR & CHIEF FINANCIAL OFFICER PLACE : MUMBAI TH DATE : 29 MAY, 2014 Sd/- PALLAVI P. SHEDGE COMPANY SECRETARY & COMPLIANCE OFFICER 80

84 Prakash Steelage Ltd. Annual Report ST CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH, 2014 Particulars Year Ended Rs. A CASH FLOW FROM OPERATING ACTIVITIES Net Profit before Tax and Prior period Adjument & exceptional item 284,143,769 Adjument for: Depreciation and Amortisation 80,866,737 Profit on Sale of Vehicle (19,508) Exceptional Item (gain on cancellation of contract) 17,500,000 Loss on Sale/Theft of Fixed Assets 5,109,670 Sundry Balances Written Back / Off (Net) 31,326,734 Provision for Doubtful Debts 4,420,192 Excess provision written back - Provision for Weal Tax 63,700 Unrealised gains and losses arising from changes in foreign exchange rates 2,724,823 Preliminary expenses w/off 934,303 Intere Received (37,608,078) Finance Co 353,271,823 Operating Profit Before Working Capital Changes 742,734,165 Adjument for: Inventories (209,423,431) Trade & Oer Receivables (851,549,857) Trade Payables & Oer Current Liabilities 288,286,298 Cash Generated from Operations (29,952,825) Direct Taxes Paid ( Net of Refund ) (53,184,981) Cash Flow before prior period Adjuments & Exceptional item (83,137,806) Prior Period Adjuments 31,090 Net Cash From / ( Used In ) Operating Activities (A) (83,106,716) B CASH FLOW FROM INVESTING ACTIVITIES Purchase of Fixed Assets / Capital work-in-progress (152,956,270) Invement in mutual fund (1,000,000) Invement in Bank Deposits 25,121,819 Sale of Fixed Assets 2,471,112 Intere Received 36,829,652 Net Cash From / (Used In) Inveing Activities (B) (89,533,687) C CASH FLOW FROM FINANCING ACTIVITIES Proceeds from Secured Borrowings (Net) 424,356,326 Repayment / (proceeds) from Unsecured Borrowings (Net) 170,869,043 Finance Co Paid (348,247,203) Dividend & Dividend Tax Paid (20,456,621) Preliminary expenses incurred by subsidiary (934,303) Net Cash From / (Used In) Financing Activities (C) 225,587,241 Net Increase / (Decrease) in Cash and Cash equivalents (A)+(B)+(C) 52,946,838 Cash and Cash equivalents at e beginning of e year 46,552,174 Exchange differences on translation of foreign currency Cash and Cash equivalents (34,182) Cash and Cash equivalents at e end of e year 99,464,830 NOTES: 1 Above atment has been prepared by e indirect meod as set out in e Accounting Standard 3 on Cash Flow Statement as specified in e Companies (Accounting Standards) Rules, Cash and Cash equivalent at e end of e year includes earmarked balance wi Bank of unpaid dividend of Rs.63,323/-. AS PER OUR REPORT OF EVEN DATE ATTACHED. FOR KHANDELWAL JAIN & CO. CHARTERED ACCOUNTANTS FIRM REGISTRATION NO: W FOR D. C. BOTHRA & CO. CHARTERED ACCOUNTANTS FIRM REGISTRATION NO: W FOR AND ON BEHALF OF THE BOARD Sd/- NARENDRA JAIN PARTNER M.NO Sd/- PAWAN BOTHRA PARTNER M.NO Sd/- PRAKASH C. KANUGO CHAIRMAN & MANAGING DIRECTOR Sd/- ASHOK M. SETH EXECUTIVE DIRECTOR & CHIEF FINANCIAL OFFICER PLACE : MUMBAI TH DATE : 29 MAY, Sd/- PALLAVI P. SHEDGE COMPANY SECRETARY & COMPLIANCE OFFICER

85 1 Summary of Significant Accounting Policies a Basis of Consolidation Notes to Consolidated Financial Statement for e year ended The consolidated financial atements (CFS) relates to Prakash Steelage Limited ( e company or e parent company ) and its subsidiary company, collectively referred to as "e Group. (i) (ii) Basis of preparation The consolidated financial atements of e Company and its subsidiary are prepared under e hiorical co convention and in accordance wi e requirements of e Companies Act, 1956 and Accounting Standard 21 Consolidated Financial Statements, as notified by Companies (Accounting Standards) Rules 2006 (which continues to be applicable in terms of General Circular 15/2013 dated September 13, 2013 of e Miniry of Corporate Affairs in respect of section 133 of e Companies Act, Use of eimates The preparation of financial atements in conformity wi India GAAP requires e management to make judgments, eimates and assumptions at affect e reported amounts of revenues, expenses, assets and liabilities and e disclosure of contingent liabilities, at e end of e reporting period. Alough ese eimates are based on e management's be knowledge of current events and actions, uncertainly about ese assumptions and eimates could result in e outcomes requiring a material adjument to e carrying amounts of assets or liabilities in future periods. (iii) Principles of Consolidation The Consolidated Financial Statements have been prepared on e following basis: (a) The financial atements of e parent company and its subsidiary have been consolidated on a line-by-line basis by adding togeer e book values of like items of assets, liabilities, income and expenses, after fully eliminating intra-group balances and transactions resulting in unrealized profits or losses on intra-group transactions and are presented to e extent possible, in e same manner as e Company s independent financial atements. (b) The excess of e co to e company of its invement in subsidiary over e company s portion of equity of e subsidiary as at e date on which invement in subsidiary is made, is recognized in e financial atement as Goodwill. The excess of Company s share of equity and reserve of e subsidiary over e co of acquisition is treated as Capital Reserve. (c) Minority Interes in e CFS is identified and recognized after taking into consideration: - The amount of equity attributable to minority s at e date on which invements in a subsidiary is made. - The minority s share of movements in equity since e date parent subsidiary relationships came into exience. (iv) The particulars of a subsidiary, which is considered for consolidation and e percentage of voting power erein of e company as on is as under: Name of Company w. e. f. Country of Incorporation Percentage of voting power as at 31 March 2014 Reporting Date Financial Status Audited / Unaudited Subsidiaries Pioneer Stainless & 10 April,2013 Ajman, UAE 100% 31 March, Audited Alloy - F.Z.C

86 Prakash Steelage Ltd. Annual Report b Meod of Accounting The financial atements have been prepared in accordance wi generally accepted accounting principles in India (India GAAP). The company has prepared ese financial atements to comply in all material respects wi e accounting andards notified under section 211(3C) (which continues to be applicable in terms of General Circular 15/2013 dated September 13, 2013 of e Miniry of Corporate Affairs in respect of section 133 of e Companies Act, 2013 and e relevant provisions of e Companies Act, The financial atements have been prepared on an accrual basis and under e hiorical co convention. c Fixed Asset (i) Fixed Assets have been ated at co of acquisition inclusive of expenses directly attributable to e acquisition of such assets. (ii) (iii) Elements of refundable duties and taxes on capital goods / fixed assets purchased have been reduced from e total co of such assets. Goodwill arising on consolidation is ated at co and impairment is recognized, if any. d Depreciation (i) Depreciation on fixed assets has been provided on Written Down Value (WDV) Meod at e rates prescribed in Schedule XIV to e Companies Act, 1956, except for Fixed Assets pertaining to Umbergaon Unit where depreciation is charged on Straight Line Meod (SLM) at e rates prescribed in schedule XIV to e Companies Act, (ii) Subsidiary company does not posses any property, plant and Equipment/machinery. e Pre-operative Expenses and Allocation ereon All pre-operative expenditure & trial run expenditure are accumulated as Capital Work-in-Progress and is allocated to e relevant fixed assets on a pro-rata / reasonable basis. f Valuation of Inventory (i) Raw Materials have been valued at lower of co or net realisable value based upon FIFO meod except where e material is specifically identifiable. (ii) (iii) (iv) (v) Work-in-progress has been valued on co of raw-material and oer direct co depending upon e age of completion of production in general. Finished goods and trading ocks have been valued at lower of co or net realisable value based upon FIFO meod except where e finished goods are specifically identifiable. "Land for Indurial Park Project" is valued at lower of co or net realizable value. Scrap, defectives and inferior production have been valued at net realisable value. (vi) Stores, spares and consumables have been valued at lower of co or net realisable value. Co/Rate considered above for valuation of inventory is exclusive of Cenvat, refundable CVD and VAT component and inclusive of oer direct co incurred for acquiring e respective material. g Material Events occurring after e Balance Sheet date Material events occurring after e date of Balance Sheet have been taken cognizance of liabilities which are material and whose future outcome cannot be ascertained wi reasonable certainty have been treated as contingent liability and are disclosed by way of notes to accounts. h Revenue Recognition A sale is recognized at e time of dispatching e goods to e cuomer excluding Value Added Tax & Excise Duty collection. Purchases including import purchases are recognized net of refundable Value Added Tax and Duty component at e time of receipt of goods. Export benefits have been recognized at e time of making e export sales & valued on eimated monetary benefit receivable ere from. 83

87 Revenue in respect of real eate sales (Indurial park project) is recognized when e Company has transferred to e buyer all significant risks and rewards of ownership, i.e., when e buyer has entered into an agreement for sale which is duly regiered and according to which e buyer has a legal right to sell or transfer his intere in e property as provided in AS-9 "Revenue Recognition" and AS-7 "Conruction Contracts" issued by e Initute of Chartered Accountants of India. i Foreign Exchange Transaction (i) Transactions denominated in foreign currencies are recorded at e exchange rates prevailing on e date of e transaction. (ii) (iii) Monetary items denominated in foreign currencies at e year end are reated at year end rates. In case of items which are covered by forward exchange contracts, e difference between e year end rate and rate on e date of e contract is recognized as exchange difference. Non monetary foreign currency items are carried at co. (iv) Exchange differences, oer an ose which are regarded as an adjument to intere co, arising on repayment of liabilities and conversion of year-end foreign currency balances pertaining to long term loans for acquiring depreciable assets including capital work in progress are adjued in e carrying co of ese assets. (v) The premium or discount arising at e inception of a forward exchange contract not intended for trading or speculation purpose is amortised as expense or income over e life of e contract. Exchange difference on account of change in rates of underlying currency at e year end is recognized in e Statement of Consolidated Profit and Loss. Any profit or loss arising on cancellation or renewal of such a forward exchange contract is recognized as income or as expense for e Year. In recording a forward exchange contract intended for trading or speculation purpose, e premium or discount on e contract is ignored and at each Balance Sheet date, e value of e contract is marked to its current market value and gain or loss on e contract is recognized in e Statement of Consolidated Profit and Loss. (vi) The exchange difference arising on revenue and oer account except as ated under (iv) above and (p) below is adjued in e Statement of Consolidated Profit and Loss. (vii) Assets and liabilities of foreign subsidiary are translated at closing rate and income and expenditure are translated at average exchange rate for e year. The difference arising on such translation is debited / credited to foreign currency translation reserve. j Employee Benefits (i) Short-term employee benefits are recognized as an expense at e undiscounted amount in e Statement of Consolidated Profit and Loss of e year in which e related service is rendered. (ii) (iii) Po employment and oer long term employee benefits are recognized as an expense in e Statement of Consolidated Profit and Loss for e year in which e employee has rendered services. The expense is recognized at e present value of e amount payable determined using actuarial valuation techniques. Actuarial gains and losses in respect of po employment and oer long term benefits are charged to e Statement of Consolidated Profit and Loss. In case of subsidiary, no provision is made for e amounts payable under UAE Labour Law applicable to e employees for e accumulated period of service as at e balance sheet date as ey are not yet due. k Preliminary and Share Issue Expenses Preliminary and Share Issue expenses are written off in e year in which such expenditure is incurred. l Excise Duty on Finished Goods Excise duty is accounted on e basis of bo, payments made in respect of goods cleared and also provision made for goods lying in e ock as at e year end. 84

88 Prakash Steelage Ltd. Annual Report m Duties and Taxes on Purchases Refundable duties and taxes on purchase of Raw Materials, oer eligible inputs and capital goods are adjued again duties and taxes payable. The unadjued credits of such duties and taxes are shown under e head Loans and Advances". n Export Benefit / Incentive Export benefits have been recognised at e time of making e export sales & valued on eimated monetary benefit receivable ere from. o Prior Period Adjument Expenses and income pertaining to earlier / previous years are accounted as Prior Period Items. p Borrowing Cos Borrowing cos directly attributable to e acquisition or conruction of qualifying fixed assets are capitalised as part of co of assets, up to e date, e asset is put to use. Borrowing cos also include exchange differences arising from foreign currency borrowings to e extent ey are regarded as an adjument to intere cos. Oer borrowing cos are charged to e Statement of Consolidated Profit and Loss in e year in which ey are incurred. q Provision for Current and Deferred Tax Provision for current tax is made after taking into consideration benefits admissible under e provisions of e Income Tax Act, Deferred tax resulting from timing differences between taxable and accounting income is accounted for using e tax rates and laws at are enacted or subantively enacted as on e Balance Sheet date. The deferred tax asset is recognized and carried forward only to e extent at ere is a virtual certainty at e asset will be realised in future. r Invements Long Term invements are valued at co. Provision for diminution in value invement is made to recognize a decline oer an temporary. Current invements are valued at co or market value whichever is lower on e la day of financial year. s Impairment of Assets An assets is treated as impaired when e carrying co of assets exceeds its recoverable value. An impairment loss is charged to e Statement of Consolidated Profit and Loss in e year in which assets are identified as impaired. The impairment loss recognized in prior accounting period is reversed if ere has been change in e eimate of recoverable amount. t Provisions, Contingent liabilities and Contingent assets A provision is recognised when e Group has a present obligation as a result of pa event and it is probable at an outflow of resources will be required to settle e obligation, in respect of which reliable eimate can be made. Provisions (excluding retirement benefits) are not discounted to its present value and are determined based on be eimate required to settle e obligation at e balance sheet date. These are reviewed at each balance sheet date and adjued to reflect e current be eimates. Contingent liabilities are not recognised in e financial atements. A contingent asset is neier recognised nor disclosed in e financial atements. u Earning Per Share (E.P.S.) Basic EPS is computed using e weighted average number of equity shares outanding during e period. Diluted EPS is computed using e weighted average number of equity and dilutive equity equivalent shares outanding during e year-end, except where e results would be anti dilutive. v Oer Accounting Policies These are set out under Significant Accounting Policies as given in e financial atements of Prakash Steelage Limited and its Group. 85

89 2 Share Capital Auorised 20,000,000 Equity Shares of Rs. 10/- each 200,000,000 Issued Subscribed & Paid up 17,500,039 Equity Shares of Rs. 10/- each 175,000,390 fully paid-up Total 175,000,390 a Reconciliation of e shares outanding at e beginning and at e end of e reporting period Equity Shares Nos. At e beginning of e period 17,500, ,000,390 Issued during e year - - Outanding at e end of e period 17,500, ,000,390 b Terms/rights attached to equity shares The Company has only one class of equity shares having a par value of Rs.10/- per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend proposed by e Board of Directors is subject to e approval of e shareholders in e ensuing Annual General Meeting. The Board of Directors, in eir meeting on 29 May, 2014, proposed a final dividend of Re 1/- per equity share. The proposal is subject to e approval of shareholders at e Annual General Meeting to be held on 13 Augu, The total dividend appropriation for e year ended amounted to Rs.1,75,00,039/- excluding corporate dividend tax of Rs. 29,74,132/-. In e event of liquidation of e Company, e holders of equity shares will be entitled to receive remaining assets of e Company, after diribution of all preferential amounts. The diribution will be in e proportion to e number of equity shares held by e shareholders. c Details of shareholders holding more an 5% shares in e Company No. of Shares (Rs. 10/- each) % of holding in e class Equity shares of Rs. 10 each fully paid Prakash C. Kanugo 3,783, % AMS Trading and Invement Private Limited 2,876, % Se Iron and Steel Private Limited 1,490, % Balmiki Agencies Private Limited 970, % 86

90 Prakash Steelage Ltd. Annual Report Reserves & Surplus Share Premium Account As Per La Balance Sheet 671,589,261 Closing balance 671,589,261 Foreign Currency Translation Reserve (323,885) General Reserve As per La Balance Sheet 225,312,948 Add : Amount Transferred from surplus balance in e atement of Profit and Loss 50,000,000 Closing balance 275,312,948 Surplus / ( Deficit ) in e atement of profit and loss As per La Balance Sheet 578,510,275 Add : Profit for e year 214,021,550 Less : Appropriations Transfer to General Reserve 50,000,000 Dividend Proposed 17,500,039 Dividend Diribution Tax 2,974,132 Total Appropriations 70,474,171 Net Surplus in e atement of Profit and Loss 722,057,654 Total Reserve and Surplus 1,668,635,978 4 Long Term Borrowings Non Current portion Current Maturities Term Loans Indian rupee loan from Banks (Secured) 138,331,331 50,888,568 Indian rupee loan from Promoter Director (Un Secured) 250,000,000 - Working Capital Loan Indian rupee loan from NBFC (Unsecured) - 10,000,000 Vehicle Loans From Banks (Secured) 2,678, , ,010,274 61,837,063 The above amount includes Secured Borrowings 141,010,274 51,837,063 Unsecured Borrowings 250,000,000 10,000,000 Amount Disclosed under e head "Oer current liabilities " ( Note 8) - 61,837,063 Net Amount 391,010,274-87

91 a (I) Indian rupee loan from Banks (secured) carries % p.a. The loan is repayable in 84 monly inallments of Rs 1,460,714/- each along wi intere from e date of loan, viz., 10 July, 2008 e loan is secured by way of mortgage of factory land & building, and hypoecation of plant & machinery of Company at Umbergaon. (Fir pari passu charge between Vijaya Bank and Bank of Baroda ) (ii) Indian rupee loan from Banks (secured) carries intere 13% p.a. to % p.a. The loan is repayable after 15 mons from e date of fir disbursement (date: ) in 59 monly equal inallments of Rs 4,170,000/- and la inallment will be of Rs. 3,970,000/- along wi intere from e date of loan, Intere and oer charges to be paid as and when debited. This loan is secured by way of mortgage of factory land & building, and hypoecation of plant & machinery of Company at Umbergaon. (Fir pari passu charge wi Vijaya Bank and Bank of Baroda). Also second pari passu charge on current assets of e Company including ocks and book debts. b Indian rupee loan from Promoter Director (Unsecured) taken from a propritory concern of a Promoter Director, carries 9.00%. The loan is repayable after e expiry of 5 years wi an option to be paid fully or in trenches. The intere is payable on yearly basis. The said loan has been introduced as per e loan sanction terms & conditions of Vijaya bank & Bank of India. and shall remain in e business during e currency of e loan from bo e banks. c Working Capital loan from NBFC (unsecured) taken on 26 February, 2013 for a period of 24 mons carrying intere rate of 10.75% p.a. flat on Rs 30,000,000/-. The same is repayable in 12 monly inallments of Rs 1,822,500/- in e fir year of e loan & inallments of Rs 1,215,000/- for e remaining period of e loan. The loan has been sanctioned again collateral of Rs. 6,000,000 wi e lender along wi po dated cheques for Principal and Intere payable ereon and personal guarantee of ree directors. d i) ii) Vehicle loans from Banks (secured) carries intere in e range of 7.50% p.a. to 12.50% p.a. All e loans are repayable in monly inallments from e date of disbursement. These loans are secured again hypoecation of respective Vehicles and Po Dated Cheques for Principal & Intere payable ereon. Vehicle loan from NBFC (secured) outanding as at end of e previous year carried intere of approximately 11.50% p.a. The loan was repayable in 34 monly inallments from e date of disbursement and is secured again hypoecation of respective vehicle and Po Dated Cheques for Principal & Intere payable ereon. 5 Deferred Tax Liabilities (Net) Deferred Tax Liability Fixed assets : Tax impact of difference between carrying amount of fixed assets in e financial atements and e income tax return 79,335,096 Gross Deferred Tax Liability 79,335,096 Deferred tax assets Outanding Leave encashment, Gratuity and Bonus 3,166,826 Provision for doubtful debts 1,845,354 Preliminary Expenses u/s. 35D of e Income Tax Act, ,945,727 Gross Deferred Tax Assets 6,957,907 Deferred Tax Liabilities (Net) 72,377,189 88

92 Prakash Steelage Ltd. Annual Report Provisions Long - Term Short - Term (a) Provision for employee benefits Provision for Leave Encashment 1,067, ,909 Provision for Gratuity 5,227, ,558 6,295, ,467 (b) Oer Provisions Proposed Dividend - 17,500,039 Dividend Diribution Tax - 2,974,132 Income Tax (Net of Advance Taxes) - 49,901,347 Fringe Benefit Tax (Net of Advance Taxes) - 100,000 Weal Tax ( Net of Advance Taxes ) - 63,700-70,539,218 6,295,509 70,967,685 7 Short-Term Borrowings 89 Cash Credit from Banks (Secured) 1,757,921,182 Buyers' Credit from Banks (Secured) 117,444,986 Working Capital loan from Bank (Secured) 60,000,000 Export Packing Credit from Banks (Secured) 81,206,287 Bill Discounting from Bank (Unsecured) 31,414,974 Bill Discounting from a NBFC (Unsecured) 140,798,381 2,188,785,810 The above amount includes Secured Borrowings 2,016,572,455 Unsecured Borrowings 172,213,355 Total 2,188,785,810 a Cash Credit from Banks (Secured) and Working Capital Loan from Bank (Secured) are repayable on demand and carries 12.20% to 12.85% p.a., Buyers Credit (Secured) represents Foreign Currency Buyers Credit from various Banks which carries intere ranging from 1 % to 5.25 % p.a. having a tenor of maximum upto 180 days., Export Packing Credit from Banks (Secured) represents export packing Credit facility from various banks. The tenor of e facility is maximum upto 180 days and e rate of intere (Foreign Currency facility) is Margin + LIBOR i.e. approximately 3.50% to 5 % p.a. and rate of intere ( Indian Currency facility) 13.00% p.a.and Bill Discounting from Banks (Secured) outanding as at e end of e previous year represents bill discounted wi various banks. The tenor of e loan is in e range of days and e rate of intere (local bill discounting) is 10.25% p.a. to 11% p.a. and rate of intere (foreign bill discounting) is in e range of 4 % to 5% p.a., All ese loans are secured by hypoecation of Stocks of Raw Material, Stocks-in-process, Finished Goods, ores and spares (not relating to plant & machinery), bills receivables, book debts & all oer current assets and movables (bo present & future) at Silvassa & Umargaon [Fir Pari Passu charges among Vijaya Bank, Bank of Baroda, Union Bank Of India, Bank of India & DBS Bank Ltd., and e whole of e movable plant & machinery including all e spare parts and all oer movable assets such as furniture, fixture, fittings, vehicles & equipments (bo present and future) at Silvassa (Fir Pari Passu charges among e above mentioned banks] and at Umargaon (Second Pari Passu charges among above mentioned banks) and collateral securities in form of fir pari-passu charge on piece and parcel of non agricultural land along wi e building at Silvassa & office premises no 101 & 102 at Islampura Street, at Mumbai, 701, Mahalaxmi chambers, at Mumbai, Bungalow unit No.C 26, at Swapan Lok Complex, Lonavla, Dirict Pune, Plot at Ohm Indurial Infraructure Park, Umbergaon, Dirict Valsad, State Gujrat and two residential Plot No.B 30 & C 20, at Sheetal Township project, Umbergaon, Dirict : Valsad, State Gujrat belonging to ree Directors and eir relatives and personal guarantee of four directors & eir relatives.

93 b Working capital loan from Bank (Unsecured) outanding as at e end of e previous year was availed for meeting working capital requirements of e company. The maximum tenor of e loan is 180 days and rollover was permitted after cooling period 3 days. The rate of intere is 12.75% to 13.25% p.a. The intere is payable monly at e end of each mon / at e end of closure of e loan transaction. Bill Discounting from Bank (Unsecured) represents export bills discounted wi local banks. The tenor of e loan is in e range of 50 to 120 days and e rate of intere is approximately 10% to 10.70% p.a. Bill Discounting from a NBFC (Unsecured) is availed from finance companies and e tenor of e loan is 90 to 120 days and e rate of intere is 14.25% to 16.75% p.a. c Loan from NBFC (unsecured) outanding as at e end of e previous year taken for 12 mons on September 28, 2012 carries STLR(floating) less 1.75% which is 14.75% p.a. payable on a monly basis is availed from a finance company. The principal amount is repayable in 3 monly equal inallments arting after 9 mons of e availment of loan. The same has been sanctioned again e pledge of unecumbered shares of e company held by a Promoter company to maintain e security cover equal to 2.50 times at all times during e tenure of e loan and irrevocable and unconditional, personal guarantee of two directors & corporate guarantee by e said promoter company. 8 Oer Current Liabilities Trade payables (including acceptances) (refer note 29 for details of dues to micro and small enterprises) 1,585,359,322 Oer Liabilities Current maturities of Long Term Borrowings ( Note 4 ) 61,837,063 Liability for expenses (refer note 29 for details of dues to micro and small enterprises) 59,255,129 Creditors for capital expenditure 5,061,970 Advance received from cuomer 113,639,006 Intere Accrued but not due on Loans 5,096,344 Unpaid Dividend 63,323 Security deposit from employees 177,100 Oers Statutory dues 15,879, ,009,404 1,846,368,726 90

94 Prakash Steelage Ltd. Annual Report CONSOLIDATED NOTES TO FINANCIAL STATEMENT FOR THE YEAR ENDED Note 9 : FIXED ASSETS Sr. No. Assets As On 01/04/2013 Rs. GROSS BLOCK Addition Rs. Deductions/ Adjuments Rs. As On 31/03/2014 Rs. As On 01/04/2013 Rs. DEPRECIATION/ AMORTISATION Dep. For e year Charged To P& L A/c Rs. Deductions/ Adjuments Rs. Upto 31/03/2014 Rs. NET BLOCK As On 31/03/2014 Rs. Tangible assets 1 Factory Land 17,127,862 4,334,204 8,818,164 12,643, ,643,902 2 Factory Building 294,460,514 35,252, ,713,161 41,287,781 9,529,909-50,817, ,895,471 3 Office Building 731, , ,191 15, , ,356 4 Plant & Machinery 565,173, ,588,774 11,681, ,080, ,990,842 57,692,836 5,006, ,677, ,402,845 5 Electrical & Telephone Inallation & office equipment 15,778, ,114-16,577,139 6,438, ,409-7,219,435 9,357,705 6 Computers 13,512, ,367-13,622,382 10,309,185 1,402,396-11,711,581 1,910,801 7 Furniture & Fixtures 25,516, ,063-25,724,247 9,313,415 1,533,438-10,846,853 14,877,393 8 Vehicles 47,682,876 2,351,230 3,275,227 46,758,879 28,136,666 5,164,798 2,389,439 30,912,025 15,846,854 9 Live Stock 22, , , ,003, ,644,400 23,775,227 1,165,872, ,897,106 76,120,279 7,395, ,621, ,251,327 Intangible assets Computer Software 5,277,375 20,069,617-25,346,992 2,368,725 4,746,459-7,115,184 18,231,808 Total Current Year 985,281, ,714,017 23,775,227 1,191,219, ,265,831 80,866,738 7,395, ,736, ,483,136 Notes: (1) During e year, e company has reviewed its fixed assets for impairment loss as required by Accounting Standards 28 Impairment of Assets. In e opinion of management no provision for impairment loss is considered necessary. 91

95 10 NON CURRENT INVESTMENTS (VALUED AT COST UNLESS STATED OTHERWISE) Maturity Date Number of Units Face Value Per Unit (Rs.) Face Value (Rs.) As at (Rs.) I MUTUAL FUNDS QUOTED FIXED MATURITY PLAN Union KBC Capital Protection Oriented Fund - Series 5 -Regular Plan - Grow 6-Feb , ,000,000 1,000,000 TOTAL 1,000,000 Notes : As at (Rs.) (a) Aggregate Book Value - Quoted Invements 1,000,000 (b) Aggregate Market Value of Quoted Invements 1,073, Loans and Advances Long - Term Short - Term Capital Advances Secured, considered good - - Unsecured, considered good 39,613,681 - (A) 39,613,681 - Security Deposit Secured, considered good - - Unsecured, considered good - Security Deposit to Related Party 55,000, Oers 4,451,228 1,823,295 (B) 59,451,228 1,823,295 Advances recoverable in cash or kind Secured, considered good - - Unsecured, considered good - 236,997,283 (C) - 236,997,283 Oer loans and advances (Unsecured, considered good) Advance income tax (net of provision for taxation) - - Balance wi central excise auority - 47,057,837 Collateral / Margin Money - 30,954,882 Deferred Premium - - Prepaid expenses - 4,876,784 Loans and advances to employees - 1,005,993 Advance income tax (net of provision for taxation) 436,446 - Balances wi atutory / Government auorities 777,663 7,519,548 (D) 1,214,109 91,415,044 (A+B+C+D) 100,279, ,235,622 92

96 Prakash Steelage Ltd. Annual Report Collateral / Margin money deposits given as security : The lender has unconditional lien in respect of e collateral of Rs.60,00,000/- and intere accruing ereon and has unconditional right to adju ese monies to set off compensation arising out of late remittance of monly inallment due in respect of Indian rupee Working Capital loan of Rs 3,00,00,000 /-. Margin money deposits wi a carrying amount of Rs. 24,954,882/- are given again e discounting of bills of exchange. Long - Term Short - Term Security deposits include Dues from Directors & eir relatives (refer note 26) 55,000,000 - Loans to employee include Dues from Officers - 890,928 Dues from Workers - 115, Oer Assets Non - Current Current Unsecured, considered good unless ated oerwise Non current bank balances (note 15) 7,898,113 - Intere Accrued on Bank deposits 432,788 4,199,436 Intere Accrued on oer deposits - 588,973 Export Benefit Incentive - 51,688,508 8,330,901 56,476, Inventories (Valued at co or market value whichever is lower, as taken, valued and certified by management ) Raw materials and components (Includes in transit Rs NIL /- Refer Note (1) (f) ) 239,490,841 Work in progress (Refer note (1) (f) ) 165,071,021 Finished goods (Refer Note (1) (f) ) 81,986,259 Land for Indurial Park (Refer Note 36) 8,818,164 Traded goods (Includes in transit Rs.9,205,310/- ( Refer Note (1) (f) ) 1,556,251,156 Stores and spares 43,578,305 2,095,195,745 93

97 14 Trade Receivable Non - Current Current Unsecured, considered good unless ated oerwise Outanding for a period exceeding six mons from e date ey are due for payment Secured, considered good - - Unsecured, considered good - 264,064,035 Doubtful - 5,429, ,493,144 Provision for doubtful debts - (5,429,109) (A) - 264,064,035 Oer debts Secured, considered good - - Unsecured, considered good - 2,527,734,211 (B) - 2,527,734,211 (A+B) - 2,791,798, Cash and Bank Balances Non - Current Current Cash and cash equivalents Currency in hand - 241,067 Cash on hand - 2,381,875 Balances wi banks: - - On current accounts - 26,778,564 Earmarked balance wi Bank (Unpaid Dividend) - 63,323 Cheques/drafts in hand - 70,000,000 Total Cash and cash equivalents 99,464,830 Oer bank balances Margin money deposit 7,898,113 90,357,856 7,898,113 90,357,856 Amount disclosed under non-current assets (Note - 12) 7,898, ,822,686 Margin money deposits given as security : Fixed deposits amounting to Rs.98,255,969/- have been kept wi e banks as a margin money for non fund based facilities. 94

98 Prakash Steelage Ltd. Annual Report Revenue From Operations Details of product sold Operating revenue Sale of Products Finished goods 2,822,281,469 Traded goods 7,553,320,864 Oer operating revenue Export Incentives 58,213,992 Profit on Consignment Sales 75,468 Revenue from operations (Gross) 10,433,891,793 Less : Excise duty # 179,495,577 Revenue from operations (Net) 10,254,396,216 # Excise duty on sales amounting to Rs.179,495,577 has been reduced from sales in e Statement of Profit and Loss and excise duty on (increase) / decrease in ock amounting to Rs.( 28,957,614) has been considered as (income) / expense in note 22 of financial atements. Finished goods sold S. S. Pipe / Tubes 2,767,647,151 S. S. Scrap 54,634,318 2,822,281,469 Traded goods sold S. S. Pipe / Tubes 1,046,411,843 S. S. Sheet / Coil /Plate 6,506,909,021 7,553,320,864 10,375,602, Oer Income 95 Intere Income on -Bank Deposits 8,779,098 -Loans & Advances 973,271 -Receivables 27,855,709 Profit on Sale of fixed assets 19,508 Discount on Forward Contracts (net of premium) 3,548,970 41,176, Raw Material Consumed Opening Stock 397,424,577 Add : Purchases 1,765,553,229 2,162,977,806 Less : Closing Stock 239,490,841 1,923,486,965

99 Details of raw material and components consumed S. S. Strip / Sheet / Coil / Plate 945,189,820 S. S. Round Bar 199,354,628 S.S. Pipe 778,942,517 1,923,486,965 Details of inventory Raw materials and components S. S. Strip / Sheet / Coil / Plate 83,587,542 S. S. Round Bar 14,642,362 S.S. Pipe 141,260, ,490, Increase / (decrease) in Stock Opening Stock : Traded Goods 970,877,712 Work in Process 115,146,155 Finished Goods 346,759,837 1,432,783,704 Closing Stock : Land for Indurial Park (Refer Note 36) 8,818,164 Traded Goods 1,556,251,156 Work in Process 165,071,021 Finished Goods 81,986,259 1,812,126,600 (379,342,896) Details of purchase of traded goods S. S. Pipe / Tubes 1,033,806,802 S. S. Sheet / Coil /Plate 6,505,366,642 7,539,173,444 96

100 Prakash Steelage Ltd. Annual Report Details of inventory 97 Land for Indurial Park (Refer Note 36) 8,818,164 8,818,164 Traded goods S. S. Pipe / Tubes 219,627,628 S. S. Sheet / Coil /Plate 1,336,623,527 1,556,251,156 Work-in-progress S. S. Strip / Sheet / Coil / Plate 44,154,226 S.S. Pipe 120,916, ,071,021 Finished goods S. S. Pipe / Tubes 79,166,381 S. S. Scrap 2,819,878 81,986, Employee Benefit Expenses Salaries, Bonus and Oer Benefits 15,356,396 Contribution to Provident and Oer Funds 3,500,521 Wages, Bonus & Oer Benefits 72,355,054 Remuneration to Directors 3,780,000 Staff welfare Expenses 5,582, ,574, Finance Cos Intere on Term Loan 14,158,987 Intere on Cash Credit & Oer Facilities 248,874,591 Intere on Car Loans 466,405 Intere On unsecured loans 13,685,164 Oer Intere 30,802, ,987,739 Bank Commission & Oer Finance Charges 45,284, ,271, ,271, Oer Expenses Manufacturing & Oer Expenses Teing, Cutting & Job Work Charges 33,647,917 Power, Fuel & Water Charges 30,225,554 Insurance (Factory) 743,428 Repairs & Maintenance (Factory) 10,160,141 Liquidated damages/late delivery charges paid 9,601,972 Excise Duty on Closing Stock (28,957,614) (A) 55,421,398

101 Adminirative, Selling Expenses & Oer Expenses Fluctuation in Foreign Currency 29,116,874 Advertisement Expenses 4,604,681 Sales Promotion Expenses 5,981,801 Discount & Rebate 1,502,660 Donation 236,596 Export Freight 49,596,456 Legal and Professional Expenses 15,542,142 Packing,Transport, Coolie & Cartage 36,894,379 Printing & Stationary 1,705,163 Rates & Taxes 4,549,316 Regiration & Tender Fees 53,538 Rent 3,130,402 Electricity Charges 1,496,735 Repairs & Maintenance 3,003,611 Security Charges 752,478 Auditors Remuneration 828,132 Insurance 1,654,828 Director Sitting Fees 147,000 Sundry Expenses 2,109,168 Telephone,Poage & Telegram 3,733,334 Travelling & Conveyance 13,899,315 Vehicle Maintenance & Insurance 8,680,867 Brokerage & Commission 334,744 Sundry Balances Written off (net) (Refer Note No.32) 31,326,734 Loss on Sale/Theft of Fixed Assets 5,109,670 Training & Recruitment Expenses 121,102 Provision for doubtful debts 4,420,192 Bad Debts written off 3,779,426 Preliminary Expenses written off 934,303 (B) 235,245,648 (A+B) 290,667,046 Note: Payment to auditors As auditor: Audit fee 720,992 In oer capacity: Taxation matters 40,000 Reimbursement of expenses 37,140 Oer services - Certification 30, ,132 98

102 Prakash Steelage Ltd. Annual Report Earnings Per Share (EPS) In accordance wi Accounting Standard 20 - Earning per Share notified under Companies (Accounting Standard) Rules, 2006, (as amended) and relevant provisions of Companies Act, 1956 e required disclosure is given below: The following reflects e profit/(loss) and share data used in e basic and diluted EPS computations : Net profit / (loss) attributable to Shareholders (Rs.) 214,021,550 Weighted average number of equity shares issued (Nos.) for basic EPS 17,500,039 Basic earnings per share of Rs. 10/- each () The Company does not have any potential dilutive equity shares. Consequently, e basic and diluted earnings per share remain e same. 24 Disclosure under Revised Accounting Standard 15 on Employee Benefits: Consequent to Accounting Standard 15 Employee Benefits (Revised 2005) becoming effective, e Company has made e provision for Defined Contribution Plan and Defined Benefit Plan. Defined Contribution Plan During e year, e Company has recognized Rs. 3,500,521/- towards Provident Fund and Employees, State Insurance Corporation as Defined Contribution Plan Obligation. Defined Benefit Plan Gratuity & Leave Encashment Liability is computed on e basis of Gratuity & Leave Encashment payable on retirement, dea and oer widrawals as per e Act and already accrued for pa service, wi e qualifying wages/salaries appropriately projected, as per e Projected Unit Credit Meod. I. Actuarial Assumption Particulars Gratuity Leave Encashment Discount Rate Current 9.10% 9.10% Rate of Increase in Compensation Levels 6.00% 6.00% II Table Showing Change in Benefit Obligation Particulars Gratuity (Rs.) Leave Encashment (Rs.) Projected Benefit Obligations (PBO) at e beginning of e year 6,361,072 1,922,771 Intere Co 484, ,306 Service Co 967, ,548 Benefits paid (904,773) (1,179,545) Actuarial (gain) / loss on Obligations (1,356,297) 12,780 Projected Benefit Obligations (PBO) at e end of e Year 5,552,118 1,171,859 99

103 III Tables of Fair value of Plan Assets Particulars Gratuity (Rs.) Leave Encashment (Rs.) Fair Value of Plan Assets at e beginning of e year - - Expected Return on Plan Assets - - Contributions - - Benefits paid - - Gain / (loss) on Plan Assets - - Fair Value of Plan Assets at e end of e year - - IV Tables of change in Plan Assets Particulars Gratuity (Rs.) Leave Encashment (Rs.) Fair Value of Plan Assets - - at e beginning of e year - - Actual return on Plan Assets - - Contributions - - Benefits paid - - Fair value of Plan Assets at e end of e year - - V. Funded Status Particulars Gratuity (Rs.) Leave Encashment (Rs.) Funded Status (5,552,118) 1,171,859 VI The Amounts to be recognised in Balance Sheet and Income Statement and e related analysis Particulars Gratuity (Rs.) Leave Encashment (Rs.) Present Value of Obligation 5,552,118 1,171,859 Fair value of Plan Assets - - Diff 5,552,118 1,171,859 Unrecognised Actuarial gains (losses) - - Unrecognised Transitional Liability - - Liability Recognised in Balance Sheet 5,552,118 1,171,

104 Prakash Steelage Ltd. Annual Report VII. Net Periodic Co Particulars Gratuity (Rs.) Leave Encashment (Rs.) Current Service Co 967, ,548 Intere Co 484, ,306 Expected Return on Plan Assets - - Net Actuarial (gain) loss recognised in e year (1,356,297) 12,780 Expenses Recognised in e Income Statement 95, ,633 VIII. Movements in e liability recognised in e Balance Sheet Particulars Gratuity (Rs.) Leave Encashment (Rs.) Opening Net Liability 6,361,072 1,922,771 Expense as above 95, ,633 Contributions paid (904,773) (1,179,545) Closing Net Liability 5,552,118 1,171,859 IX Experience Adjuments Particulars Gratuity (Rs.) Leave Encashment (Rs.) Defined benefit obligation 5,552,118 1,171,859 Plan assets - - Surplus/ (deficit) (5,552,118) (1,171,859) Experience adjument on plan liabilities (771,947) 140,152 Acturial Loss/(Gain) due to change in assumptions (584,350) (127,372) Experience adjument on plan assets - - Net Acturial Loss/ (Gain) for e year (1,356,297) 12, Segment Reporting The Company s operations predominantly relates to manufacturing and trading of Stainless Steel Tubes & Pipes, and e revenue from Real Eate segment is yet to commence, ere is no separate reporting segment as per Accounting Standard 17 Segment Reporting notified under e Companies (Accounting Standard) Rules, Related Party Disclosure Disclosure requirement as per Accounting Standard 18 (AS-18) "Related Party Disclosure" notified under Companies (Accounting Standard) Rules, 2006, (as amended) and relevant provisions of Companies Act 1956, 101

105 Related Parties M/s. Sunrise Metal Induries M/s. AMS Trading & Invements Pvt. Ltd. M/s. Se Iron & Steel Pvt. Ltd. M/s. Se Steelage Pvt. Ltd. M/s. Prakash Stainless Pvt. Ltd. M/s. PCK Metal Pvt. Ltd. M/s. Se Carbon & Alloys Pvt. Ltd. M/s. Prakash & Daga Infra Projects Pvt. Ltd. M/s. Prakash C. Kanugo (HUF) M/s. Ashok M. Se (HUF) M/s. Prakash Integrated Hi-Tech Steel And Metal Cluer Private Limited M/s. Chandan and Kanugo Land Developer M/s. Hemant & Co. M/s. Prakash Land Developer M/s. Hemant P Kanugo ( HUF ) M/s Vimal P Kanugo ( HUF ) Shri Prakash C. Kanugo, Chairman & Managing Director Shri Ashok M. Se, Executive Director Shri Hemant P. Kanugo, Whole Time Director Shri Kamal P. Kanugo, Whole Time Director Smt. Babita P. Kanugo Shri Vimal P. Kanugo Shri Kirti P. Kanugo Smt. Ekta H. Kanugo Nature of relationship Enterprise of which key management person (Shri Prakash Kanugo) is proprietor Associates / Enterprises over which directors and / or eir relatives has significant influence Key Management Personnel Relatives of Key Management Personnel Note: Related Party Relationships have been identified by e management and relied upon by e Auditors. Details of transactions between e Company & related parties & e atus of outanding balances as on. Nature of Transactions Name of Party Associates/ Enterprises over which directors and/ or eir relatives has significant influence Key Management Personnel () Relatives of Key Management Personnel Unsecured M/s. AMS Trading & Invements Loans Taken Pvt. Ltd. 100,000, M/s. Sunrise Metal Induries 250,000, Unsecured M/s. AMS Trading & Invements 100,000, Loans Repaid Pvt. Ltd. Intere Paid M/s. Sunrise Metal Induries 2,713,

106 Prakash Steelage Ltd. Annual Report Nature of Transactions Name of Party Associates/ Enterprises over which directors and/ or eir relatives has significant influence Key Management Personnel () Relatives of Key Management Personnel Remuneration / Shri Ashok M. Se - 1,050,000 - Salary Shri Hemant P. Kanugo - 750,000 - Shri Kamal P. Kanugo - 630,000 - Shri Kirti P. Kanugo ,000 Shri Prakash C. Kanugo - 1,350,000 - Shri Vimal P. Kanugo ,000 Rent Paid Shri Prakash C. Kanugo - 60,000 - Outanding Balances M/s. Prakash C. Kanugo (HUF) 480, M/s. Ashok M. Se (HUF) 360, Smt. Ekta H. Kanugo ,000 Shri Kamal P. Kanugo - 660,000 - Shri Hemant P. Kanugo - 108,000 - Office Deposit M/s. Ashok M. Se (HUF) 11,000, Given M/s. Prakash C. Kanugo (HUF) 14,000, Smt. Ekta H. Kanugo ,000,000 Shri Kamal P. Kanugo - 11,000,000 - Oer Deposit Shri Kamal P. Kanugo - 5,000,000 - Given Rent Payable Shri Kamal P. Kanugo - 45,000 - Intere Payable M/s. Sunrise Metal Induries 2,442, Unsecured M/s. Sunrise Metal Induries 250,000, Loan Taken Corporate Guarantee & Pledge of equity shares M/s. AMS Trading and invement Pvt. Ltd. 27 Capital and Oer Commitment AMS Trading and invement Pvt. Ltd had given an irrevocable and unconditional corporate guarantee and pledged 12,64,542 equity shares of e company held by em again e loan of Rs. 5,00,00,000/- taken by e company from NBFC to maintain e security cover equal to 2.50 times at all times during e tenure of e loan. The tenure of e loan was from to During e year, e loan has been fully repaid on (a) Eimated amount of contracts remaining to be executed on Capital Account and not provided for (Net of Advances) 106,967,967 (b) Oer Commitments - Commitment for invements - 103

107 28 Contingent Liabilities Contingent liabilities not provided for in respect of: (a) Guarantees given by e bankers of e company 43,665,328 (b) Sales Tax demands disputed in appeals 15,459,374 (c) Letter of Credit - (d) Gujarat Commercial Tax Penalty - (e) Central Sales Tax Liability towards pending declaration forms 29,811,068 (f) Disputed Excise Duty Rebate Claim 551,080 (g) Disputed CENVAT Credit 3,599,712 (h) Commitment towards development work for Indurial Park Project 85,000, Details of dues to micro, small and medium enterprises as defined under e MSMED Act, 2006 The Company has amounts due to suppliers under The Micro, Small and Medium Enterprise Development Act, 2006, (MSMED Act) as at. The disclosure pursuant to e said Act is as under: Particulars Principal amount remaining unpaid to any supplier as at e year end 887,709 Intere due ereon - Amount of intere paid during e year 39,886 Amount of payments made to e supplier beyond e appointed day during e - accounting year Amount of intere due and payable for e period of delay in making payment - (which have been paid but beyond e appointed day during e year) but wiout adding e intere specified under e Micro Small and Medium Enterprises Development Act, Amount of intere accrued and remaining unpaid at e end of e accounting year - The amount of furer intere remaining due and payable even in e succeeding - years, until such date when e intere dues as above are actually paid to e small enterprises for e purpose of disallowance as a deductible expenditure under e MSMED Act 2006 The information has been given in respect of such vendors to e extent ey could be identified as Micro, Small and Medium Enterprises on e basis of information available wi e Company. 30 Some of e balances of Trade Receivables, Deposits, Loans & Advances, Advances received from cuomers, Liability for expenses and Trade Payables are subject to confirmation from e respective parties and consequential reconciliation/adjument arising ere from, if any. The management, however, does not expect any material variation. 31 In e opinion of e Management, Current Assets, Loans & Advances are approximately of e value ated, if realized, in e ordinary course of business. The provision for all known and determined liability is adequate and not in e excess of e amount reasonably required. 32 Sundry balances (net) written off amounting to Rs. 31,326,734/- are net of sundry credit balances written back amounting to Rs.85,65,196/- 33 Prior period adjument (Net) amounting to Rs 31,090/-(credit) includes income of Rs. 290,025/- and expenses Rs. 258,935/-. 34 Exceptional item represents gain of Rs.1,75,00,000 /- on account of forfeiture of advance due to cancellation of sale contract by e cuomer as per terms of contract. 104

108 Prakash Steelage Ltd. Annual Report Disclosures of derivative inruments The Company has entered into e following derivative inruments. All e forward contracts are accounted for as per Accounting Policies ated in Note 1(I) annexed to Balance Sheet and Statement of Profit and Loss. The Company uses foreign currency forward contracts to hedge its risks associated wi foreign currency fluctuations. The Company does not use forward contracts for speculative purposes. (a) Outanding Short-term Forward Exchange Contracts entered into by e Company on account of receivables : No. of Contracts 21 US Dollar equivalent 2,600,000 INR equivalent 156,259,480 (b) Outanding Short-term Forward Exchange Contracts entered into by e Company on account of payables : No. of Contracts - US Dollar equivalent - INR equivalent - (c) The un-hedged foreign currency exposure as on 31 March 2014 is given below: Payables as at 31 March 2014 Foreign Currency Amount Local Currency USD 2,416, ,216,550 EURO 84,150 6,948,828 GBP - - Receivables as at 31 March 2014 Foreign Currency Amount Local Currency USD 853,094 51,270,803 EURO 559,839 46,229,548 GBP Company has initiated e development of e Indurial Park Project on its idle land at Palgam (Umbergaon) and accordingly, e Company has converted e Land into Stock-in-Trade at lower of co or net realizable value i.e. at co of Rs. 88,18,164/-. 37 Since, e Company has prepared e Consolidated financial Statement for e fir time, figures for e previous year have not been given. AS PER OUR REPORT OF EVEN DATE FOR KHANDELWAL JAIN & CO. CHARTERED ACCOUNTANTS FIRM REGISTRATION NO: W Sd/- NARENDRA JAIN PARTNER M.NO PLACE : MUMBAI TH DATE : 29 MAY, 2014 FOR D. C. BOTHRA & CO. CHARTERED ACCOUNTANTS FIRM REGISTRATION NO: W Sd/- PAWAN BOTHRA PARTNER M.NO SIGNATURES TO NOTES 1 TO 37 FOR AND ON BEHALF OF THE BOARD Sd/- PRAKASH C. KANUGO CHAIRMAN & MANAGING DIRECTOR Sd/- PALLAVI P. SHEDGE COMPANY SECRETARY & COMPLIANCE OFFICER Sd/- ASHOK M. SETH EXECUTIVE DIRECTOR & CHIEF FINANCIAL OFFICER

109 Financial Information of Subsidiary Company Name of e Subsidiary Company Pioneer Stainless & Alloy - FZC Reporting Currency USD Exchange rate used Capital 3,029,571 Reserves 48,211,278 Total Assets 51,914,628 Total Liabilities 51,914,628 Invements oer an invements in subsidiary - Turnover 812,217,323 Profit Before Taxation 48,529,265 Provision for Taxation - Profit After Taxation 48,529,265 Proposed Dividend - Country UAE Statement Pursuant to Section 212 of e Companies Act, 1956, relating to Subsidiary Company Sr. Particulars Pioneer Stainless & Alloy - FZC 1. Financial year of e Subsidiary Company ended on Shares of e Subsidiary Company held on e above date and extent of Holding: a) Equity / Ordinary / Common Shares 100 b) Extent of Holding (%) 100% 3. The net aggregate amount of profit / (loss), of e subsidiary company so far as it is concerned wi e members of e Company: I) Dealt wiin e holding company s accounts a) For e Financial year of e Subsidiary 48,529,265 b) For e previous Financial years of e Subsidiary/since N.A. it became e Holding company s subsidiary ii) Not dealt wiin e holding company s accounts: a) For e Financial year of e Subsidiary N.A. b) For e previous Financial years of e Subsidiary/since N.A. it became e Holding company s subsidiary 106

110 Notes 107

111 Notes 108

112 Notes 109

113 Prakash Steelage Limited CIN : L27106MH1991PLC Regd. Office: 701, Mahalaxmi Chambers, Bhulabhai Desai Road, Mahalaxmi, Mumbai inveorsgrievances@prakasheelage.com Website: Tel. No.: ; Fax No.: Attendance Slip Please fill e attendance slip and hand it over at e entrance of e meeting hall. Joint holders may obtain additional Slip at e venue of e meeting. DP ID* Folio No Client ID* No of shares Name and Address of e Shareholder / Proxy: rd I hereby record my presence at e 23 ANNUAL GENERAL MEETING of e Company held on Friday, e 26 September, 2014, at 4:00 p.m., at Victoria Memorial School for e Blind, Opp. A.C. Market, Tardeo, Mumbai Signature of Shareholder / Proxy NOTE: Shareholder/Proxy holder desiring to attend e meeting should bring his copy of e Annual Report for reference at e meeting. * Applicable for members holding shares in electronic form.

114 Prakash Steelage Limited CIN : L27106MH1991PLC Regd. Office: 701, Mahalaxmi Chambers, Bhulabhai Desai Road, Mahalaxmi, Mumbai inveorsgrievances@prakasheelage.com Website: Tel. No.: ; Fax No.: FORM NO. MGT-11 Proxy Form [Pursuant to Section 105(6) of e Companies Act, 2013 and rule 19(3) of e Companies (Management and Adminiration) Rule, 2014] CIN : Name of e Company: L27106MH1991PLC Prakash Steelage Limited Regiered Address: 701, Mahalaxmi Chambers, Bhulabhai Desai Road, Mahalaxmi, Mumbai Name of e Member(s): Regiered Address: Id: Folio No / Client ID: DP ID: I / We being e member(s) of Equity Shares of Prakash Steelage Limited, hereby appoint: 1. Name: Address: ID: Signature:, or failing him / her 2. Name: Address: ID: Signature:, or failing him / her 3. Name: Address: ID: Signature: rd as my / our proxy to attend and vote (on a poll) for me / us and on my / our behalf at e 23 ANNUAL GENERAL MEETING of e Company, to be held on Friday, e 26 September, 2014 at p.m. at Victoria Memorial School for e Blind, Opp. A.C. Market, Tardeo, Mumbai and at any adjournment ereof in respect of such resolutions as are indicated below:

115 Prakash Steelage Limited CIN : L27106MH1991PLC Regd. Office: 701, Mahalaxmi Chambers, Bhulabhai Desai Road, Mahalaxmi, Mumbai inveorsgrievances@prakasheelage.com Website: Tel. No.: ; Fax No.: FORM NO. MGT-11 Proxy Form [Pursuant to Section 105(6) of e Companies Act, 2013 and Rule 19(3) of e Companies (Management and Adminiration) Rule, 2014] Resolution No Description of e business as set out rd in e 23 AGM Notice dated 13 Augu, 2014 For Again 1. Consider and adopt Standalone and Consolidated Audited Financial Statements, Reports of e Board of Directors and Auditors Declaration of Dividend on e Equity Shares of e Company. Appointment of Mr. Kamal P. Kanugo (DIN ) as a Director, liable to retire by rotation. 4. Re-appointment of M/s. Khandelwal Jain & Co., Chartered Accountants (Firm Regiration No W), as e Joint Statutory Auditors and to fix eir remuneration. 5. Appointment of M/s. Batliboi & Purohit, Chartered Accountants (Firm Regiration No W), as e Joint Statutory Auditors in place of M/s. D. C. Bora & Co., Chartered Accountants (Firm Regiration No W), and to fix eir remuneration Appointment of Mr. A. Prakashchandra Hegde (DIN ) as an Independent Director for a period of 5 years.. Appointment of Dr. Bipin C. Doshi (DIN ) as an Independent Director for a period of 5 years Appointment of Mr. Gautam Chand C. Jain (DIN ) as an Independent Director for a period of 5 years.. Appointment of Mr. Himanshu J. Thaker (DIN ) as an Independent Director for a period of 5 years. 10. Ratification of remuneration to be paid to M/s. Amish Parmar & Associates, Co Accountants for e financial year ending on 31 March, Signed is day of, Signature of Share holder: Signature of Proxy holder(s): Affix Revenue Stamp Note: This form of proxy in order to be effective should be duly completed and deposited at e Regiered Office of e Company at 701, Mahalaxmi Chambers, Bhulabhai Desai Road, Mahalaxmi, Mumbai not less an 48 hours before e commencement of e meeting.

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