1 MATERIAL ACCOUNTING POLICIES:
This note provides a list of the significant accounting
policies adopted in the preparation of these
standalone financial statements. These policies have
been consistently applied to all the years presented,
unless otherwise stated.
1.1 Basis of preparation
(i) Statement of Compliance and basis of
preparation
The Statement of Assets & Liabilities of the
Company as at 31st March, 2025 and the
Statement of Profit and Loss, the Statement of
Changes in Equity and the Statement of Cash
Flows for the year ended 31st March, 2025 and
other explanatory information are together
referred as "Audited Financial Statements".
These "Audited Financial Statements"
are approved for issue by the Board
of Directors on 26th May, 2025.
Financial Statements have been prepared in
accordance with the accounting principles
generally accepted in India including Indian
Accounting Standards (Ind AS) prescribed under
the Section 133 of the Companies Act, 2013 read
with rule 3 of the Companies (Indian Accounting
Standards) Rules, 2015 and relevant amendment
rules issued thereafter.
(ii) Basis of preparation and measurement
The financial statements of the Company are
prepared in accordance with Indian Accounting
Standards (Ind AS), under the historical cost
convention on the accrual basis as per the
provisions of the Companies Act, 2013 ("the
Act"), except for:
• Financial instruments - measured at fair
value;
• Assets held for sale - measured at fair
value less cost of sale;
• Plan assets under defined benefit plans -
measured at fair value
• Employee share-based payments -
measured at fair value
• Biological assets - measured at fair value
• In addition, the carrying values of recognised
assets and liabilities, designated as hedged
items in fair value hedges that would
otherwise be carried at cost, are adjusted
to record changes in the fair values
attributable to the risks that are being
hedged in effective hedge relationship.
1.2 Use of estimates
The preparation ofthe financial statements in conformity
with Ind AS requires the Management to make
estimates and assumptions considered in the reported
amounts of assets and liabilities (including contingent
liabilities) and the reported income and expenses during
the year. The Management believes that the estimates
used in preparation of the financial statements are
prudent and reasonable. Future results could differ due
to these estimates and the differences between the
actual results and the estimates are recognised in the
periods in which the results are known / materialise.
This note provides an overview of the areas where
there is a higher degree of judgment or complexity.
Detailed information about each of these estimates
and judgments is included in relevant notes together
with information about the basis of calculation.
The areas involving critical estimates or judgments are:
Valuation of financial instruments
Useful life of property, plant and equipment
Defined benefit obligation
Provisions
Recoverability of trade receivables
Recognition of revenue and allocation of transaction
price
Current tax expense and current tax payable
Estimates and judgments are regularly revisited.
Estimates are based on historical experience
and other factors, including futuristic reasonable
information that may have a financial impact on the
Company.
1.3 Cash and cash equivalents (for purpose of Cash Flow
Statement)
Cash comprises cash on hand and demand deposits
with banks. Cash equivalents are short-term balances
(with an original maturity of three months or less from
the date of acquisition) and highly liquid investments
that are readily convertible into known amounts of
cash and which are subject to insignificant risk of
changes in value.
For the purposes of the statement of cash flow, cash
and cash equivalents is as defined above, net of
outstanding bank overdrafts. In the balance sheet,
bank overdrafts are shown within borrowings in
current liabilities
1.4 Cash flow statement
Cash flows are reported using indirect method,
whereby Profit before tax reported under statement of
profit/ (loss) is adjusted for the effects of transactions
of non-cash nature and any deferrals or accruals
of past or future cash receipts or payments. The
cash flows from operating, investing and financing
activities of the Company are segregated based on
available information.
1.5 Property, plant and equipment
All the items of property, plant and equipment are
stated at historical cost net off cenvat credit less
depreciation. Historical cost includes expenditure that
is directly attributable to the acquisition of the items.
Subsequent costs are included in the asset's
carrying amount or recognised as a separate asset,
as appropriate, only when it is probable that future
economic benefits associated with the item will
flow to the Company and the cost of the item can
be measured reliably. The carrying amount of any
component accounted for as a separate asset is
derecognised when replaced. All other repairs and
maintenance are charged to profit or loss during
the reporting period in which they are incurred.
Depreciation is recognised so as to write off the cost
of assets (other than freehold land and properties
under construction) less their residual values over
their useful lives, using the straight-line method. The
estimated useful life is taken in accordance with
Schedule 11 to the Companies Act, 2013. The estimated
useful lives, residual values and depreciation method
are reviewed at the end of each reporting period, with
the effect of any changes in estimate accounted for
on a prospective basis.
An item of property, plant and equipment is
derecognised upon disposal or when no future
economic benefits are expected to arise from the
continued use of the asset. Any gain or loss arising
on the disposal or retirement of an item of property,
plant and equipment is determined as the difference
between the sales proceeds and the carrying amount
of the asset and is recognised in profit or loss.
Cost of Capital Work in Progress ('CWIP') comprises
amount paid towards acquisition of property, plant and
equipment outstanding as of each balance sheet date
and construction expenditures, other expenditures
necessary for the purpose of preparing the CWIP for it
intended use and borrowing cost incurred before the
qualifying asset is ready for intended use. CWIP is not
depreciated until such time as the relevant asset is
completed and ready for its intended use
1.6 Intangible assets
Intangible assets acquired separately
Intangible assets with finite useful lives that
are acquired separately are carried at cost less
accumulated amortisation and accumulated
impairment losses. Amortisation is recognised on a
straight-line basis over their estimated useful lives.
The estimated useful life and amortisation method
are reviewed at the end of each reporting period, with
the effect of any changes in estimate being accounted
for on a prospective basis. Intangible assets with
indefinite useful lives that are acquired separately are
carried at cost less accumulated impairment losses.
Intangible assets acquired in business combinations
are stated at fair value as determined by the
management of the Company on the basis of valuation
by expert valuers, less accumulated amortisation. The
estimated useful life of the intangible assets and the
amortisation period are reviewed at the end of each
financial year and the amortisation period is revised
to reflect the changed pattern, if any.
Amortisation of Intangible Assets
Intangible assets with finite useful lives that
are acquired separately are carried at cost less
accumulated amortisation and accumulated
impairment losses. Amortisation is recognised on a
straight-line basis over their estimated useful lives.
The estimated useful life and amortisation method
are reviewed at the end of each reporting period, with
the effect of any changes in estimate being accounted
for on a prospective basis. Intangible assets with
indefinite useful lives that are acquired separately are
carried at cost less accumulated impairment losses.
An intangible asset is derecognised on disposal,
or when no future economic benefits are expected
from use or disposal. Gains or losses arising from
derecognition of an intangible asset, measured as the
difference between the net disposal proceeds and the
carrying amount of the asset, are recognised in profit
or loss when the asset is derecognised"
Useful lives of intangible assets
Intangible assets are amortised over their estimated
useful life on straight line method as follows:
a. Computer Software 5 Years
1.7 Impairment of tangible and intangible assets
At the end of each reporting period, the Company
reviews the carrying amounts of its tangible and
intangible assets to determine whether there is
any indication that those assets have suffered an
impairment loss. If any such indication exists, the
recoverable amount of the asset is estimated in order
to determine the extent of the impairment loss (if any).
When it is not possible to estimate the recoverable
amount of an individual asset, the Company estimates
the recoverable amount of the cash-generating unit
to which the asset belongs. When a reasonable
and consistent basis of allocation can be identified,
corporate assets are also allocated to individual cash¬
generating units, or otherwise they are allocated to the
smallest Company of cash-generating units for which
a reasonable and consistent allocation basis can be
identified.
Intangible assets with indefinite useful lives and
intangible assets not yet available for use are tested
for impairment at least annually, and whenever there
is an indication that the asset may be impaired.
Recoverable amount is the higher of fair value less
costs of disposal and value in use. In assessing value
in use, the estimated future cash flows are discounted
to their present value using a pre-tax discount rate
that reflects current market assessments of the time
value of money and the risks specific to the asset for
which the estimates of future cash flows have not
been adjusted.
If the recoverable amount of an asset (or cash¬
generating unit) is estimated to be less than its carrying
amount, the carrying amount of the asset (or cash¬
generating unit) is reduced to its recoverable amount.
An impairment loss is recognised immediately in
profit or loss.
When an impairment loss subsequently reverses, the
carrying amount of the asset (or a cash-generating
unit) is increased to the revised estimate of its
recoverable amount, but so that the increased carrying
amount does not exceed the carrying amount that
would have been determined had no impairment loss
been recognised for the asset (or cash-generating
unit) in prior years. A reversal of an impairment loss is
recognised immediately in profit or loss.
1.8 Inventories
Inventories comprise of raw materials, packing
materials, work-in-progress, finished goods and
stores and spares. Inventories are valued at lower of
cost and net realisable value. Costs are ascertained
on Weighted Average basis. Costs includes cost of
purchase and other costs incurred in bringing each
product to its present location and condition. In the
case of manufactured inventories, cost includes
cost of raw materials, packing materials and an
appropriate share of fixed and variable production
overheads. Fixed production overheads are allocated
on the basis of normal operating capacity. Variable
production overheads are allocated based on actual
use of production facilities. Net realisable value
represents the estimated selling price for inventories
in normal course of business, less all estimated costs
of completion and costs necessary to make the sale.
Provision is made for cost of obsolescence and other
anticipated losses whenever considered necessary.
1.9 Revenue Recognition
Revenue is recognised when control of goods is
transferred to a customer in accordance with the
terms of the contract. The control of the goods is
transferred upon delivery to the customers either at
factory gate of the Company or specific location of
the customer or when the goods are handed over to
the freight carrier, as per the terms of the contract. A
receivable is recognised by the Company when the
goods are delivered to the customer as this represents
the point in time at which the right to consideration
becomes unconditional, as only the passage of time
is required before payment is due.
In certain customer contracts, freight services
are treated as a distinct separate performance
obligation and the Company recognises revenue for
such services when the performance obligation is
completed.
The Company considers the terms of the contract in
determining the transaction price. The transaction price
is based upon the amount the Company expects to be
entitled to in exchange for transferring of promised
goods and services to the customer after deducting
incentive programs, included but not limited to
discounts, volume rebates, etc
Revenue is recognised at a determined transaction
price when identified performance obligations are
satisfied. The bill and hold contracts are entered at
the request of the customer. Revenue from bill and
hold contracts is recognised at the agreed transaction
price (determined price) .The price for bill and hold
contracts is determined at the time of entering into
the transaction and the performance obligation
is satisfied when goods have been appropriated
towards the sale transaction (the control of asset is
transferred to the customer).
1.10 Other Income
Interest Income:-
Interest income from a financial asset is recognised
when it is probable that the economic benefits will
flow to the Company and the amount of income can be
measured reliably. Interest income is accrued on a time
basis, by reference to the principal outstanding and at
the effective interest rate applicable, which is the rate
that exactly discounts estimated future cash receipts
through the expected life of the financial asset to that
asset's net carrying amount on initial recognition.
Dividend Income:-
Dividend is recognised as income when the
shareholder's right to receive payment has been
established (provided that it is probable that the
economic benefits will flow to the Company and the
amount of income can be measured reliably).
Export Incentives:-
Duty drawback, MEIS and SEIS benefits are recognised
at the time of exports and the benefits in respect of
licenses received by the Company against export
made by it are recognised as and when goods are
imported against them.
1.11 Foreign Currency Transactions
The functional currency for the Company is determined
as the currency of the primary economic environment
in which it operates. For the Company, the functional
currency is the local currency of the country in which
it operates, which is INR.
a) In preparing the financial statements the
Company, transactions in currencies other
than the entity's functional currency (foreign
currencies) are recognised at the rates of
exchange prevailing at the dates of the
transactions. At the end of each reporting
period, monetary items denominated in foreign
currencies are retranslated at the rates prevailing
at that date. Non-monetary items carried at fair
value that are denominated in foreign currencies
are retranslated at the rates prevailing at the
date when the fair value was determined. Non¬
monetary items that are measured in terms
of historical cost in a foreign currency are not
retranslated.
b) The exchange differences arising on settlement/
restatement of long-term foreign currency
monetary items are taken into Statement of
Profit and Loss.
1.12 Employees Benefits
Payments to defined contribution retirement
benefit plans are recognised as an expense when
employees have rendered service entitling them to the
contributions:
For defined benefit retirement benefit plans, the
cost of providing benefits is determined using the
projected unit credit method, with actuarial valuations
being carried out at the end of each annual reporting
period. Remeasurement, comprising actuarial gains
and losses, the effect of the changes to the asset
ceiling (if applicable) and the return on plan assets
(excluding net interest), is reflected immediately in
the balance sheet with a charge or credit recognised
in other comprehensive income in the period in which
they occur. Remeasurement recognised in other
comprehensive income is reflected immediately in
retained earnings and is not reclassified to profit
or loss. Past service cost is recognised in profit or
loss in the period of a plan amendment. Net interest
is calculated by applying the discount rate at the
beginning of the period to the net defined benefit
liability or asset. Defined benefit costs are categorized
as follows:
a. service cost (including current service cost, past
service cost, as well as gains and losses on
curtailments and settlements);
b. net interest expense or income; and
c. remeasurement
The Company presents the first two components of
defined benefit costs in profit or loss in the line item
'Employee benefits expense'. Curtailment gains and
losses are accounted for as past service costs
The retirement benefit obligation recognised in the
balance sheet represents the actual deficit or surplus
in the Company's defined benefit plans. Any surplus
resulting from this calculation is limited to the present
value of any economic benefits available in the form
of refunds from the plans or reductions in future
contributions to the plans.
Short-term and other long-term employee benefits
A liability is recognised for benefits accruing to
employees in respect of wages and salaries, annual
leave and sick leave in the period the related service is
rendered at the undiscounted amount of the benefits
expected to be paid in exchange for that service.
Liabilities recognised in respect of short¬
term employee benefits are measured at the
undiscounted amount of the benefits expected
to be paid in exchange for the related service.
Liabilities recognised in respect of other long-term
employee benefits are measured at the present value
of the estimated future cash outflows expected to be
made by the Company in respect of services provided
by employees up to the reporting date.
1.13 Accounting for Taxes
Income tax expense represents the sum of the tax
currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit
for the year. Taxable profit differs from 'profit before
tax' as reported in the statement of profit and loss
because of items of income or expense that are
taxable or deductible in other years and items that are
never taxable or deductible. The Company's current
tax is calculated using tax rates that have been
enacted or substantively enacted by the end of the
reporting period.
Deferred tax
Deferred tax is recognised on temporary differences
between the carrying amounts of assets and liabilities
in the financial statements and the corresponding
tax bases used in the computation of taxable profit.
Deferred tax liabilities are generally recognised for all
taxable temporary differences. Deferred tax assets
are generally recognised for all deductible temporary
differences to the extent that it is probable that
taxable profits will be available against which those
deductible temporary differences can be utilised. Such
deferred tax assets and liabilities are not recognised
if the temporary difference arises from the initial
recognition (other than in a business combination)
of assets and liabilities in a transaction that affects
neither the taxable profit nor the accounting profit.
In addition, deferred tax liabilities are not recognised
if the temporary difference arises from the initial
recognition of goodwill.
Deferred tax liabilities are recognised for taxable
temporary differences associated with investments
in subsidiaries and associates, and interests in
joint ventures, except where the Company is able
to control the reversal of the temporary difference
and it is probable that the temporary difference will
not reverse in the foreseeable future. Deferred tax
assets arising from deductible temporary differences
associated with such investments and interests are
only recognised to the extent that it is probable that
there will be sufficient taxable profits against which to
utilize the benefits of the temporary differences and
they are expected to reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed
at the end of each reporting period and reduced to
the extent that it is no longer probable that sufficient
taxable profits will be available to allow all or part of
the asset to be recovered.
Deferred tax liabilities and assets are measured at
the tax rates that are expected to apply in the period
in which the liability is settled or the asset realized,
based on tax rates (and tax laws) that have been
enacted or substantively enacted by the end of the
reporting period.
The measurement of deferred tax liabilities and assets
reflects the tax consequences that would follow from
the manner in which the Company expects, at the end
of the reporting period, to recover or settle the carrying
amount of its assets and liabilities.
Current and deferred tax for the year/period
Current and deferred tax are recognised in profit
or loss, except when they relate to items that are
recognised in other comprehensive income or directly
in equity, in which case, the current and deferred tax
are also recognised in other comprehensive income
or directly in equity respectively. Where current tax or
deferred tax arises from the initial accounting for a
business combination, the tax effect is included in the
accounting for the business combination.
1.14 Leases
Transition
Effective April 01, 2019, the Company adopted Ind As
116 "leases" and applied the standard to all applicable
lease contracts existing on 1st April, 2019 using the
modified retrospective method with cumulative effect
of initially applying the standard recognised on the date
of initial application. Accordingly, company has not
restated comparative information and recognised right
of use assets at an amount equal to lease liability.
The Company's lease asset primarily consists
of leases for buildings. The Company assesses
whether a contract contains a lease, at inception of
a contract. A contract is, or contains, a lease if the
contract conveys the right to control the use of an
identified asset for a period of time in exchange for
consideration. To assess whether a contract conveys
the right to control the use of an identified asset, the
Company assesses whether: (i) the contract involves
the use of an identified asset (ii) the Company has
substantially all of the economic benefits from use of
the asset through the period of the lease and (iii) the
Company has the right to direct the use of the asset.
Company as a lessee
At the date of commencement of the lease, the
Company recognises a right-of-use asset ("ROU")
and a corresponding lease liability for all lease
arrangements in which it is a lessee, except for
leases with a term of twelve months or less (short¬
term leases) and low value leases. For these short¬
term and low value leases, the Company recognises
the lease payments as an operating expense.
The right-of-use assets are initially recognised at
cost, which comprises the initial amount of the lease
liability adjusted for any lease payments made at or
prior to the commencement date of the lease plus
any initial direct costs less any lease incentives. They
are subsequently measured at cost less accumulated
depreciation and impairment losses. Right-of-use
assets are depreciated from the commencement date
on a straight-line basis over the shorter of the lease
term and useful life of the underlying asset. Right of
use assets are evaluated for recoverability whenever
events or changes in circumstances indicate that
their carrying amounts may not be recoverable. For
the purpose of impairment testing, the recoverable
amount (i.e. The higher of the fair value less cost to sell
and the value-in-use) is determined on an individual
asset basis unless the asset does not generate cash
flows that are largely independent of those from
other assets. In such cases, the recoverable amount
is determined for the Cash Generating Unit (CGU) to
which the asset belongs.
The lease liability is initially measured at amortised
cost at the present value of the future lease payments.
The lease payments are discounted using the interest
rate implicit in the lease or, if not readily determinable,
using the incremental borrowing rates. Lease liabilities
are remeasured with a corresponding adjustment to
the related right of use asset if the Company changes
its assessment if whether it will exercise an extension
or a termination option.
Lease liability and ROU asset have been separately
presented in the Balance Sheet and finance cost
portion of lease payments have been classified as
financing cash flows.
1.15 Earnings Per Share
Basic earnings per share is computed by dividing the
profit / (loss) after tax (including the post tax effect of
extraordinary items, if any) by the weighted average
number of equity shares outstanding during the year
adjusted for bonus elements, if any, issued during the
period. Diluted earnings per share is computed by
dividing the profit / (loss) after tax (including the post
tax effect of extraordinary items, if any) as adjusted
for dividend, interest and other charges to expense
or income (net of any attributable taxes) relating to
the dilutive potential equity shares, by the weighted
average number of equity shares considered for
deriving basic earnings per share and the weighted
average number of equity shares which could have
been issued on the conversion of all dilutive potential
equity shares. Potential equity shares are deemed
to be dilutive only if their conversion to equity
shares would decrease the net profit per share from
continuing ordinary operations. Potential dilutive
equity shares are deemed to be converted as at the
beginning of the period, unless they have been issued
at a later date. The dilutive potential equity shares are
adjusted for the proceeds receivable had the shares
been actually issued at fair value (i.e. average market
value of the outstanding shares). Dilutive potential
equity shares are determined independently for each
period presented. The number of equity shares and
potentially dilutive equity shares are adjusted for
share splits / reverse share splits and bonus shares,
as appropriate.
1.16 Segment Reporting
Identification of segments:
Segments are identified in line with Ind AS-108
"segment Reporting", taking into consideration the
internal organisation and management structure as
well as the differential risk and returns of the segment.
Based on the Company's business model,
manufacturing and/or trading of pipes, tubes & steel
have been considered as the only reportable business
and geographical segment.
Segment Policies:
The Company prepares its segment information in
conformity with the accounting policies adopted for
preparing and presenting the financial statements of
the Company as a whole.
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