W.S. Industries (India) Limited has disclosed receipt of penalty orders from GST authorities for alleged violations related to Input Tax Credit claims across multiple financial years. The company made this disclosure under Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, demonstrating its commitment to transparency despite the penalties being below mandatory disclosure thresholds.

GST Orders and Financial Impact

The State Tax Officer, Group-III, Intelligence-II, Chennai-6, issued orders under Section 74 of the Goods and Services Tax Act, 2017, alleging ineligible claim/availment of Input Tax Credit for five consecutive financial years. The orders also impose interest under Section 50(3) and penalties under Section 74 of the GST Act.

Regulatory Compliance and Disclosure Framework

Under SEBI regulations, fines or penalties of ₹1 lakh or more imposed by sectoral regulators must be disclosed within 24 hours under Regulation 30. Penalties below ₹1 lakh require disclosure on a quarterly basis in the Corporate Governance Report. Since the penalty amount for each individual financial year falls below the prescribed monetary threshold of ₹1 lakh, mandatory immediate disclosure was not required.

Penalty Reduction Provisions

The GST Act provides for penalty mitigation under Section 74, allowing companies to avail a reduced penalty of 50% of the tax amount upon remittance of tax and applicable interest within 30 days from issuance of Form GST DRC-07. This provision could potentially reduce the company's penalty burden if timely payments are made.

Corporate Governance and Transparency

Despite the penalties being below mandatory disclosure thresholds, W.S. Industries has voluntarily made this consolidated disclosure in the interest of good corporate governance and transparency. The company stated that assessments for all five relevant financial years have now been concluded, prompting this comprehensive disclosure.

Financial and Operational Impact

The company has indicated that there is no material impact on its financials, operations, or other activities from these GST orders. The financial implication comprises tax, interest, and penalty amounts as specified in the respective orders issued through Form GST DRC-07 on the GST portal. Interest under Section 50(3) is payable at 18% per annum from the applicable due date until actual payment and requires recomputation at the time of remittance.

WS Industries has filed its quarterly statement of deviation/variation in fund utilization for Q3 FY26, covering multiple preferential issues conducted during 2025. The Chennai-based company submitted the mandatory disclosure to stock exchanges on February 14, 2026, in compliance with SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Fund Raising Activities Covered

The statement encompasses three significant fund raising initiatives undertaken by the company:

The October 2025 preferential issue involved 20,00,000 equity shares allotted at Rs.100 per share, while the convertible warrants comprised 2,25,00,000 warrants allotted at Rs.100 per warrant, generating an upfront consideration of Rs.56.25 crores.

Fund Utilization Status

The company reported utilizing Rs.5.70 crores during the previous quarter ended September 30, 2025. However, the original timeline for fund utilization, as approved by shareholders at the Extra-Ordinary General Meeting held on May 2, 2024, expired on October 31, 2025.

Timeline Extension Proposal

W.S. Industries is proposing to extend the fund utilization timeline to October 31, 2027. This extension aligns with SEBI (ICDR) Regulations, 2018, which allows convertible warrants to be converted into equity shares within 18 months from allotment date. The last date for conversion of the current warrants is March 4, 2026.

Regulatory Approvals and Governance

The fund utilization statement has undergone proper corporate governance procedures:

• Audit Committee Review: The statement was reviewed by the Audit Committee
• Board Approval: Taken on record by the Board of Directors at their meeting on February 14, 2026
• Shareholder Approval Required: Timeline extension subject to approval at the 3rd Extra-Ordinary General Meeting of FY 2025-26 scheduled for February 20, 2026

Previous Shareholder Approvals

The company has maintained transparency through multiple shareholder meetings. Original objects of the issues were approved at the 1st Extra-Ordinary General Meeting held on July 25, 2025. Subsequently, variations in object-wise fund utilization were approved at the 2nd Extra-Ordinary General Meeting held on December 12, 2025, covering both the equity shares and convertible warrants allotted in October 2025.