r) Provisions:
Provisions are recognised when the Company
has a present legal or constructive obligation
as a result of past events, it is probable that an
outflow of resources will be required to settle
the obligation and the amount can be reliably
estimated. These are reviewed at each year end
and reflect the best current estimate. Provisions
are not recognised for future operating losses.
Where there are a number of similar obligations,
the likelihood that an outflow will be required in
settlement is determined by considering the class
of obligations as a whole. A provision is recognised
even if the likelihood of an outflow with respect to
any one item included in the
same class of obligations may be small.
Provisions are measured at the present value
of best estimate of the Management of the
expenditure required to settle the present
obligation at the end of the reporting period.
The discount rate used to determine the present
value is a pre-tax rate that reflects current market
assessments of the time value of money and the
risks specific to the liability. The increase in the
provision due to the passage of time is recognised
as interest expense.
s) Contingent Liabilities:
Contingent liabilities are disclosed when there
is a possible obligation arising from past events,
the existence of which will be confirmed only by
the occurrence or non-occurrence of one or more
uncertain future events not wholly within the
control of the Company or a present obligation
that arises from past events where it is either
not probable that an outflow of resources will
be required to settle the obligation or a reliable
estimate of the amount cannot be made.
t) Employee benefits:
Short-term employee benefits:
All employee benefits payable within 12 months
of service such as salaries, wages, bonus, ex-gratia,
medical benefits etc. are recognised in the year in
which the employees render the related service
and are presented as current employee benefit
obligations within the Balance Sheet. Termination
benefits are recognised as an expense as and
when incurred.
Short-term leave encashment is provided at
undiscounted amount during the accounting
period based on service rendered by employees.
Compensation payable under Voluntary
Retirement Scheme is being charged to
Statement of Profit and Loss in the year of
settlement.
Other long-term employee benefits:
The liabilities for earned leave and sick leave
are not expected to be settled wholly within 12
months after the end of the period in which
the employees render the related service. They
are therefore measured as the present value of
expected future payments to be made in respect
of services provided by employees up to the end
of the reporting period using the projected unit
credit method. The benefits are discounted using
the market yields at the end of the reporting
period that have terms approximating to the
terms of the related obligation. Remeasurements
as a result of experience adjustments and changes
in actuarial assumptions are recognised in profit
or loss.
The obligations are presented as current liabilities
in the Balance Sheet if the entity does not have an
unconditional right to defer settlement for at least
12 months after the reporting period, regardless of
when the actual settlement is expected to occur.
Defined contribution plan:
Contributions to defined contribution schemes
such as contribution to Provident Fund,
Superannuation Fund, Employees' State
Insurance Corporation, National Pension Scheme
and Labours Welfare Fund are charged as an
expense to the Statement of Profit and Loss based
on the amount of contribution required to be
made as and when services are rendered by the
employees. The above benefits are classified as
Defined Contribution Schemes as the Company
has no further defined obligations beyond the
monthly contributions.
Defined benefit plan:
Gratuity:
Gratuity liability is a defined benefit obligation and
is computed on the basis of an actuarial valuation
by an actuary appointed for the purpose as per
projected unit credit method at the end of each
financial year. The liability or asset recognised in
the Balance Sheet in respect of defined benefit
pension and gratuity plans is the present value of
the defined benefit obligation at the end of the
reporting period less the fair value of plan assets.
The present value of the defined benefit obligation
is determined by discounting the estimated
future cash outflows by reference to market yields
at the end of the reporting period on Government
bonds that have terms approximating to the
terms of the related obligation.
The net interest cost is calculated by applying the
discount rate to the net balance of the defined
benefit obligation and the fair value of plan assets.
This cost is included in employee benefit expense
in the Statement of Profit and Loss.
Remeasurements gains and losses arising from
experience adjustments and changes in actuarial
assumptions are recognised in the period in
which they occur directly in Other Comprehensive
Income. They are included in retained earnings in
the Statement of changes in equity and in the
Balance Sheet.
Changes in the present value of the defined benefit
obligation resulting from plan amendments or
curtailments are recognised immediately in profit
or loss as past service cost.
u) Research and Development expenditure:
Research and Development expenditure is
charged to revenue under the natural heads
of account in the year in which it is incurred.
Research and Development expenditure on
property, plant and equipment is treated in the
same way as expenditure on other property, plant
and equipment.
v) Earnings per share:
Earnings per share (EPS) is calculated by dividing
the net profit or loss for the period attributable
to Equity Shareholders by the weighted average
number of Equity shares outstanding during
the period. Earnings considered in ascertaining
the EPS is the net profit for the period and any
attributable tax thereto for the period.
w) Contributed equity:
Equity shares are classified as equity. Incremental
costs directly attributable to the issue of new
shares or options are shown in equity as a
deduction, net of tax, from the proceeds.
Critical estimates and judgements
Preparation of the Financial Statements requires
use of accounting estimates which, by definition,
will seldom equal the actual results. This Note
provides an overview of the areas that involved a
higher degree of judgements or complexity, and
of items which are more likely to be materially
adjusted due to estimates and assumptions
turning out to be different than those originally
assessed. Detailed information about each of
these estimates and judgements is included in
relevant notes together with information about
the basis of calculation for each affected line item
in the Financial Statements.
The areas involving critical estimates or
judgements are:
i) Estimation of useful life of tangible assets
ii) Estimation of defined benefit obligation
Estimates and judgements are continually
evaluated. They are based on historical experience
and other factors, including expectations of future
events that may have a financial impact on the
Company and that are believed to be reasonable
under the circumstances
Regrouped/ Recast/Reclassified
Figures of earlier year have been reclassified to
conform to Ind AS presentation requirement.
Rounding off.
Figures less than 50000 have been rounded off.
Authorisation for issue of the Financial statement
The Financial Statements were authorised for
issue by the Board of Directors on May 28th, 2026.
a) Property, plant and equipment as detailed above have been mortgage or hypothecated as security
for loans taken as at March 31, 2026. See note 17 & 22 for loans taken against which these assets are
mortgage or hypothecated by the company.
b) No revaluation has been done during the year with respect to Property Plant and Equipment.
c) The title deed of immovable properties is held in the name of company.
i.) The Company has entered into lease arrangements with Gujarat Industrial Development
Corporation (GIDC) for industrial land used for factory operations in Gujarat.
ii) ROU consist of Land 1 located at Sanand-II Gujrat and Land 2 is located at Chharodi Sanand, Gujrat.
iii) The carrying amount of the right-of-use assets as at 31 March 2026 is 44,933.70 lakhs (Land 1:
41,217.23 lakhs and Land 2: 43,716.47 lakhs). The lease term liability is upto 31 March 2035 and 31
March 2045 respectively for Land 1 and Land 2. The lease term extendable upto 99 years.
iv) Lease liabilities have been measured using an incremental borrowing rate of 10.50% per annum.
v) The following is the break-up of current and non-current lease liabilities as at March 31, 2026 and
March 31, 2025
(i) The Company holds 3.87% equity shares of Ampus RJ Solar Private Limited, a company engaged
in the business of providing solar energy to its customers. The Company is having power purchse
agreement (of 5 MW) with Amplus RJ Solar Private Limited and the company has received Security
deposit of Rs.178.00 lacs against 5MW PPP from Amplus RJ Solar Pvt Ltd shown in Note-19.
As Per Ind As 109 paragraph B5.2.3, all investments in equity instruments and contracts on those
instruments must be measured at fair value. However, in limited circumstances, cost may be an
appropriate estimate of fair value.
(i) As at March 31,2026, the company has given a interest free loan amounting to Rs.535.10 lakhs to Hi¬
Tech Pipes Employees Welfare Trust.
(ii) As at March 31,2026, the company has given a interest free loan amounting to Rs.25808.98 lakhs to
wholly owned subsidiary i.e. Hitech Metalex Private Limited , HTL Metal Pvt Ltd, HTL Ispat Pvt Ltd, Hi-
tech Global Steels Pvt Ltd and Sain Software Systems Pvt Ltd for the purpose of meeting its capital
and operational expenditure requirements. The loan will be repayable as and when the funds are
available. The maximum amount outstanding during the year ended March 31,2026 was Rs.25808.98
lakhs.
Notes:
i) The mode of valuation of inventories has been stated in note 1 (l) of Material Accounting Policy
Information.
ii) Inventories have been hypothecated as security against certain bank borrowings of the company
(Refer note 22).
iii) Cost of inventory (including stores & spares) recognised as expense during the year amounted to
Rs.318762.92 lacs (March 31,2025: Rs.231724.29 lacs) .
iv) Raw material Inventory lying with third party. Nil
v) Provision for slow moving inventory of stores & spares Nil
vi) Details of Stock-in-transit Nil
a) The credit period on sale of goods ranges from 15 to 90 days without securities. No interest is charged
on trade receivables for the amount overdue obove the credit period.
b) Before accepting any new customer, the company evaluates the financial position, past performance,
business opportunities, credit references etc. of the new customers and define credit limit and credit
period. The credit limit and the credit period are reviewed at periodical intervals.
c) The company does not generally hold any collateral or other credit enhancements over the balances.
d) Trade receivables have been hypothecated as security towards Company's borrowings from bank
(refer security note below Note 22)
e) There are no outstanding debts due from directors or other officers of the company.
c.1) Board of Directors of the company had proposed issue of Converitible equity share warrants 55,40,000
@ Rs.692/- on prefrential basis. Which were approved by Shareholders of the company through
postal ballot cum e-voting held on 27.12.2022, and the same had been allotted on 10.01.2023, being
receipt of upfront 25% application money i.e Rs.173/- (balance 75% i.e Rs. 519/- was payable within 18
months i.e. dated 09.07.2024) . Further on being full paymnet by warrant holders during the period
26,22,500 share warrants had been converted in to the 1:10 number of equity shares as approved by
the board of ‘Securities allotment-commitee' on respective date.
c.2) As on 31.03.2025 Total- 53,40,000 warrants were converted in to equity shares and the remaining
2,00,000 fully convertible warrants were forfeited Refer note 16(iv).
d) Rights, preferences and restrictions attached to equity shares
The Company has single class of equity shares having a par value of Re.1/- each w.e.f. 17.03.2023 (On
being split off 1 Share of Rs.10/- each in to 10 share of Re.1/- each fully paid) and carry an equal right
g) For the period of five years immediately preceding the date of Balance Sheet,
Aggregate number & class of shares allotted by the company as fully paid up pursuance to contracts
without receipt of cash. Nil
Aggregate number & class of shares bought back by the company. Nil
Aggregate number & class of shares alloted by the company as fully paid up by way of bonus shares.
Nil
(i) Securities premium account
Securities premium reserve is created due to premium on issue of shares. These reserve is utilised in
accordance with the provisions of the Indian Companies Act,2013 (" The Companies Act").
The Company, at its QIP meeting held on October 11, 2024 approved allotment of 2,69,96,734 Equity
Shares of Re.1/- each pursuant to Qualified institutional placement at a securities premium of Rs.184.5
per share under Private Placement, to eligible qualified institutional buyers. The total offer expenses
in relation to share issued amounting to Rs.2837.56 Lakhs had been adjusted against security
premium. Refer Note 47.
(ii) General reserve
The general reserve is used from time to time to transfer profits from retained earnings for
appropriation purposes.There is no policy of regular transfer. General reserves represents the free
profits of the Company available for distribution. As per the Companies Act, certain amount was
required to be transferred to General Reserve every time Company distribute dividend. General
reserve is not an item of OCI, items included in the general reserve will not be reclassified to profit or
loss.
(iii) Share Warrant (Fully Convertible in Equity Shares)
The company issued and allotted 55,40,000 fully convertible warrants to non-promoters, promoter
and promoter group on preferential basis @ Rs. 692/- each on subscription amount of Rs.173/- each
(being 25% application money), which were convertible into equal number of equity shares Rs.10/-
each fully paid, carries pari - passu rank with existing equity shares, The holder of convertible warrants
was to convert his holding of convertible warrants within 18 month from the date of allotment of
such convertible warrants. During 2024-25 Financial Year, 26,22,500 warrants had been converted
into 1:10 number of Equity shares as per details given herein below.
Note:
Remaining 2,00,000 fully convertible warrants were forfeited Refer note (iv) below.
(iv) Capital Reserve
The company issued and allotted 55,40,000 fully convertible warrants to non-promoters, promoter
and promoter group on preferential basis @ Rs. 692/- each on subscription amount of Rs.173/- each
(being 25% application money), which were convertible into equal number of equity shares Rs.10/-
each fully paid, carries pari - passu rank with existing equity shares, The holder of convertible warrants
was to convert his holding of convertible warrants within 18 month from the date of allotment of
such convertible warrants. However till 09/07/2024 (Approved date for payment of entire amount)
53,40,000 warrants had been converted into 1:10 number of Equity share and 2,00,000 FCW's were
not converted. Hence, the Company forfeited the application money of Rs.3,46,00,000 (Rs. Three
crore, fortysix lakhs) for 2,00,000 FCW's and transferred the same on 30th Sept'2024 in the Capital
Reserve Account.
(v) Retained earnings
It represents unallocated/ un-distributed profit of the company. The amount that can be distributed
as dividend by the company as dividends to its equity shareholders is determined based on the
separate financial statements of the company and also considering the requirements of the
companies Act,2013.
21. INCOME TAXES
Indian companies are subject to Indian income tax on a standalone basis. Each entity is assessed to tax
on taxable profits determined for each fiscal year beginning on April 1st and ending on March 31st.
Statutory income taxes are assessed based on book profits prepared under generally accepted
accounting principles in India adjusted in accordance with the provisions of the (Indian) Income tax Act,
1961. Such adjustments generally relate to depreciation of fixed assets, disallowances of certain provisions
and accruals, deduction for tax holidays, the set-off of tax losses and depreciation carried forward and
retirement benefit costs. Statutory income tax is charged at 22% plus a surcharge and education cess.
Working capital loan are secured by
Working capital facilities availed are secured by first pari passu charge on entire present and future
current assets pertains to Manufacturing facilities situated at Plot no 10 & 16 Sikandrabad and Plot no E-6
GIDC Sanand of the company. Further, secured by first pari passu charge on Land and Building situated
on plot No.10 & 16, Sikandrabad distt. Bulandshahr, under the consortium banking. Exclusive charge on
E-6, GIDC, Sanand, Ahmedabad with one bank. Additionaly second pari passu on present and future
moveable fixed assets of the company. These credit facitilities are further secured by personel guarantee
of promoter-directors of the company.
Quarterly statements of current assets filed by the company with banks or financial institutions are is in
agreement with the books of accounts.
(b) The Company has no transactions with the companies struck off under Companies Act, 2013 or
Companies Act, 1956.
(c ) Disclosures under Rule 11(e)(ii) of the Company (Audit & Auditors) Rule, 2014 :
The Company has not advanced or loaned or invested any fund to any persons or entitities, including
foreign entities (Intermediaries) with the understanding that the intermediary shall, directly
or indirectly lend or invest in other persons or entities identified by or on behalf of the Company
(Ultimate Beneficiaries) or provide any guarantee, security or the like to or on behalf of the Ultimate
Beneficiaries.
The Company has not received any fund from any persons or entities, including foreign entities
(Funding Party) with the understanding that the Company shall, directly or indirectly lend or invest
in other persons or entities identified by or on behalf of the funding party ("Ultimate Beneficiaries")
or provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
(d) Details of benami property held
No proceeding has been initiated or are pending against the company for holding any benami
property under the Benami
Transactions (Prohibitions) Act, 1988 (45 of 1988) and the rules made thereunder.
(e) Wilful defaulter
The Company has not been declared wilful defaulter by any bank or financial institution or any
lender.
(f ) Undisclosed Income
There is no income surrendered or disclosed as income during the current or previous year in the tax
assessments under the Income
Tax Act, 1961, that has not been recorded in the books of account.
( g) Details of crypto currency or virtual currency
The Company has not traded or invested in crypto currency or virtual currency during the current or
previous year.
(h) Valuation of PP&E, intangible asset and investment property
The Company has not revalued its property, plant and equipment (including right-of-use assets) or
intangible assets or both during the current or previous year.
(i) Registration of charges or satisfaction with Registrar of Companies
There are no charges or satisfaction which are yet to be registered with the Registrar of Companies
beyond the statutory period.
(j) Disclosures under Rule 11(f) of the Company (Audit & Auditors) Rule, 2014 - Dividends
The final dividend on shares is recorded as a liability on the date of approval by the shareholders. The
Company declares and pays dividends in Indian rupees. Companies are required to pay / distribute
dividend after deducting applicable taxes. The remittance of dividends outside India is governed by
Indian law on foreign exchange and is also subject to withholding tax at applicable rates.
40 SEGMENT REPORTING
In accordanace with the provisions of Ind AS 108 -Operating Segment, the operations of the company
falls under manufacturing of Steel Products and which is also considered to be the reportable segment
by management.
(a) Gratuity
The gratuity scheme provides for lump sum payment to vested employees at retirement/death while
in employment or on termination of employment of an amount equivalent to 15 days salary payable
for each completed year of service or part thereof inexcess of 6 months subject to a limit of Rs. 20.00
Lacs (Previous Year Rs. 20.00 Lacs). Vesting occurs upon completion of 5 years of service.
(b) Defined contribution plans
The Company makes provident fund contributions which are defined contribution plans, for
qualifying employees. Under the schemes, the Company is required to contribute a specified
percentage of the payroll costs to fund the benefits. The Company recognised Rs.63.72 Lacs (Year
ended March 31, 2025 Rs.68.18 lacs) for Provident Fund contributions in the statement of profit and
loss. The contributions payable to these plans by the Company are at rates specified in the rules of
the schemes. The obligation of the Company is limited to the amount contributed and it has no
further contractual nor any constructive obligation.
Notes:
The discount rate indicated above reflects the estimated timing and currency of benefit payments.
It is based on the yields / rates available on applicable bonds as on the current valuation date.
The estimate of future salary increase considered in actuarial valuation takes into account inflation,
seniority, promotion and other relevant factors such as supply and demand in the employment
market
h) The Group does not expects to make any contribution to the defined benefit plans during the next
financial year.
i) Sensitivity analysis
Significant actuarial assumptions for the detemination of the defined benefit obligation are discount
rate, expected salary increase and mortality. The sensitivity analysis below have been determined
based on reasonably possible changes of the assumptions occurring at the end of the reporting
period, while holding all other assumptions constant. The results of sensitivity analysis is given below:
Please note that the sensitivity analysis presented above may not be representative of the actual
change in the defined benefit obligation as it is unlikely that the change in assumptions would occur
in isolation of one another as some of the assumptions may be correlated.
J) Risk Exposures
Valuations are performed on certain basic set of pre-determined assumptions and other regulatory
framework which may vary over time. Thus, the Company is exposed to various risks in providing the
above gratuity benefit which are as follows:
Interest Rate risk: The plan exposes the Company to the risk of fall in interest rates. A fall in interest
rates will result in an increase in the ultimate cost of providing the above benefit and will thus result
in an increase in the value of the liability (as shown in financial statements).
Liquidity Risk: This is the risk that the Company is not able to meet the short-term gratuity payouts.
This may arise due to non availabilty of enough cash / cash equivalent to meet the liabilities or holding
of illiquid assets not being sold in time.
Salary Escalation Risk: The present value of the defined benefit plan is calculated with the
assumption of salary increase rate of plan participants in future. Deviation in the rate of increase of
salary in future for plan participants from the rate of increase in salary used to determine the present
value of obligation will have a bearing on the plan's liabilty.
Demographic Risk: The Company has used certain mortality and attrition assumptions in valuation
of the liability. The Company is exposed to the risk of actual experience turning out to be worse
compared to the assumption.
Regulatory Risk: Gratuity benefit is paid in accordance with the requirements of the Payment of
Gratuity Act, 1972 (as amended from time to time). There is a risk of change in regulations requiring
higher gratuity payouts (e.g. Increase in the maximum limit on gratuity of Rs. 20,00,000).
Note: The above is a standard list of risk exposures in providing the gratuity benefit. The Company
is advised to carefully examine the above list and make suitable amendments (including adding
more risks, if relevant) to the same before disclosing the above in its financial statements.
42 CORPORATE SOCIAL RESPONSIBILITY
As per Section 135 of the Companies Act, 2013, a company, meeting the applicability threshold, needs
to spend at least 2% of its average net profit for the immediately preceding three financial years on
corporate social responsibility (CSR) activities. A CSR committee has been formed by the Company as per
the Act. The funds were primarily allocated to a corpus and utilized through the year on these activities
which were specified in schedule VII of the Companies Act, 2013:
Consequent to the Companies (Corporate Social Responsibility Policy) Amended Rules, 2021 (the rules),
the Company has subsequent to balance sheet date has deposited amount of Rs.Nil (March 31, 2025 :
Rs.Nil) to a separate bank account since all the required amount spend during the year. Therefore, no any
amount unspent remained to deposit in separate bank account.
Notes:
Based on legal opinion, the company is of the view that the past unspent obligation till March 31,2026
not carried forward will be treated as lapsed and accordingly does not be spent/ transferred to a separate
bank account.
b) Fair Value Heirarchy
This section explains the judgements and estimates made in determining the fair values of the
financial instruments that are:
(a) recognised and measured at fair value and
(b) measured at amortised cost and for which fair values are disclosed in the financial statements.
To provide an indication about the reliability of the inputs used in determining fair value, the Company
has classified its financial instruments into the three levels prescribed under the accounting standard.
Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices.
Level 2: The fair value of financial instruments that are not traded in an active market ( for example
traded bonds) is determined using valuation techniques which maximise the use of observable
market data and rely as little as possible on entity specific estimates. If all significant inputs required
to fair value an instrument are observable , the instrument is included in level 2
The company's capital requirements are mainly to fund its expansion, working capital and strategic
acquisition. The principal source of funding of the company has been, and is expected to continue
to be, cash generated from its operations supplemented by short term borrowings from bank . The
company is not subject to any externaly imposed capital requirements.
The company regularly consider other financing and refinancing opportunities to diversify its
debt profile, reduce interest cost and closely monitors its judicious allocation amongst competing
expansion projects and strategic acquisition, to capture market opportunities at minimum risk.
The company monitors its capital gearing ratio, which is net debt divided to total equity. Net debt
includes, interest bearing loans and borrowing less cash and cash equivalents, bank balances other
cash and cash equivalents.
The Company's activities expose it to market risk including foreign currency risk, interest rate risk,
liquidity risk and credit risk. This note explains the sources of risk which the entity is exposed to
and how the entity manages the risk : The Company's risk management is carried out by a treasury
department under policies approved by the managment. Treasury department identifies, evaluates
and hedges financial risks in close co-operation with the Company's operating units. The board and
managment provides principles for overall risk management, as well as policies covering specific
areas, such as hedging of foreign currency transactions foreign exchange risk.
The Company has an Audit Committee established by its Board of Directors for the Risk Management
Framework and developing and monitoring the Company's risk management policy. The risk
management policies are established to ensure timely identification and evaluation of risks, setting
acceptable risk thresholds, identifying and mapping controls against these risks. The Company's
activities to provide reliable information to the Management and the Board to evaluate the adequacy
of the risk management framework in relation to the risk faced by the Company.
The risk management policies aims to mitigate the following risks arising from the financial
instruments:
a) Market risk
(i) Foreign currency risk
(ii) Interest rate Risk
b) Credit risk; and
c) Liquidity risk
a) Market risk Market risk is the risk of any loss in upcomimg earnings, in realisable fair values or in
future cash flows that may result from a change in the price of a financial instrument. The value of
a financial instrument may change as result of changes in interest rates, commodity prices foreign
currency exchange rates, liquidity and other market changes. Future based market movements can
not be normally forecasted with accuracy.
(i) Foreign currency risk The Company's functional currency is Indian Rupees (INR), the company
is importing capital goods in foreign currency. Since the company importing capital goods and
any foreign currency exchange fluctuation will simulteniously impact on cost of particular capital
goods(Machinery) but it will have minimul impact on profitability of the company. The Company is
not exposed to exchange rate risk under its trade and debt portfolio.
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will
fluctuate because of changes in market interest rates. The Company is exposed to interest rate risk
because funds are borrowed at both fixed and floating interest rates. Interest rate risk is measured by
using the cash flow sensitivity for changes in variable interest rate. The borrowings of the Company is
in rupees with a mix of fixed and floating rates of interest. The Company has exposure to interest rate
risk, arising principally on changes in lending rates. The Company uses a mix of interest rate sensitive
financial instruments to manage the liquidity and fund requirements for its day to day operations
like short term borrowings. The risk is managed by the Company by maintaining an appropriate
mix between fixed and floating rate borrowings, and by the use of interest rate swap contracts and
further by keeping a close eye view on the market variables and time to time negotiations with the
Bankers for reduction of rate of interest.
b) Credit risk management:
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in
financial loss to the Company. Credit risk encompasses of both, the direct risk of default and the risk
of deterioration of credit worthiness as well as concentration risks.
Company's credit risk arises principally from the trade receivables and advances.
Company's trade receivables are generally categories into following categories:
1. Export customers
2. Institutional customers
3. Supply to Government Department
4. Dealers
In case of export sales, in order to mitigate credit risk, generally sales are made on advance payment
terms. Where export sales are not made on advance payment terms, the same are secured through
letter of credit or bank guarantee, etc.
In case of sale to institutional customers, in order to mitigate credit risk, majority of the sales are
secured by letter of credit, bank guarantee, post dated cheques, etc. however , certain credit period
is allowed to some reputed institution in contry like Reliance, L&T, NTPC, BHEL etc.
In case of sale to Government departments there is no credit risk, majority of the sales made to
Government are secured.
In case of sale to dealers certain credit period is allowed with vintage of 3-5 years atleast. In order to
mitigate credit risk, majority of the sales made to dealers are secured by way of post dated cheques
(PDC), conducting reference check also within the market.
Further, Company has an ongoing credit evaluation process in respect of customers who are allowed
credit period.Customer credit risk is managed centrally by the company and subject to established
policy, procedures and control relating to customer credit risk management. Credit quality of a
customer is assessed based on financial position, past performance, business/ economic conditions,
market reputation,vintage, expected business etc. Based on that credit limit & credit terms are
decided. Outstanding customer receivables are regularly monitored.
In general, it is presumed that credit risk has significantly increased since initial recognition if the
payments are more than 30 days past due.
c) Liquidity risk management
Liquidity risk refers to the risk of financial distress extra ordinary high financing costs arising due
to shortage of liquid funds in a situation where business conditions unexpectedly deteriorate and
requiring financing. The Company requires funds both for working capital needs as well as for
capex purposes. The Company generates sufficient cashflow for operations, which together with
the available cash and cash equivalents and short term borrowings provide liquidity. The Company
manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing
facilities, by continues monitoring of actual cash flows, and by matching the maturity profiles of
financial assests and liabilities.
The Company has a liquidity risk management framework for managing its short term, medium
term and long term sources of funding vis-a-vis short term and long term utilization requirement.
This is monitored through a rolling forecast showing the expected net cash flow, likely availability of
cash and cash equivalents, and available undrawn borrowing facilities.
(ii) Maturities of financial liabilities
The table below analyses the Company's all non-derivative financial liabilities into relevant maturity
based on their contractual maturities. The amounts disclosed in the table are the contractual
undiscounted cash flows.
The Company's revenue is exposed to the market risk of price fluctuations related to the sale of
its products. Market forces generally determine prices for the steel products sold by the company.
These prices may be affected by supply and demand, production costs (including the cost of raw
material inputs) global ,regional economic conditions, growth and so on. Adverse changes in any of
these factors may reduce the revenue that the Company earns from the sale of its products.
The Company purchases the steel and other building products in the open market from third parties
in prevailing market price. The Company is therefore subject to fluctuations in the prices of HR Coils,
Zinc etc.
The Company sells the products at prevailing market prices. Similarly the Company procures the
products based on prevailing market rates as the selling prices of steel products and the prices of
inputs moves in the same direction.
44 LEASES:
a) As Lessor
The company has entered into leasing arrangements for renting of a building admesuring
approximately 1262 Square meter at the rate of Rs. 870/- per SM monthly For the period of 12 months,
which is renewable.
b) As Leassee:
Operating Lease
Various building have been taken on operating lease with lease term for 11 months for office primises,
storage space & employee residence which are renewable on a periodic basis by mutual consent
of both parties. All the operating lease are cancelable by either parties for any reason by giving a
prior notice. There is no restriction imposed by lease aggrements, such as those concerning dividens,
additional debts.
Finance Lease
The Company has entered into lease arrangements with the Gujarat Industrial Development
Corporation (GIDC) for industrial land used in its manufacturing operations. Two Land have been
taken on lease during FY 25-26 i.e Land 1 located at Sanand-II Gujrat and Land 2 is located at Chharodi
Sanand, Gujrat. The lease term liability is upto 31 March 2035 and 31 March 2045 respectively for Land
1 and Land 2. The lease term extendable upto 99 years. The lease liabilities have been measured using
an incremental borrowing rate of 10.50% per annum.
Note :
The company has a capital commitments of Rs.2148.36 Lakhs towards acquisition and commissioning
of Plant & Machinery.
The Company has issued Financial bank guarantee for procurement of raw material against which
liability has been accepted under trade payables.
The Company has reviewed all its pending litigations and proceedings and has adequately provided
for where provisions are required and disclosed as contingent liabilities where applicable, in its
financial statements. The Company does not expect the outcome of these proceedings to have a
materially effect on its financial statements.
b) Commitments
1) The Company has other commitments, for purchase orders which are issued after considering
requirements per operating cycle for purchase of services, employee's benefits. The Company does
not have any other long term commitments or material non-cancellable contractual commitments
/contracts, including derivative contracts for which there were any material foreseeable losses.
47 During the FY 2024-25, the Company had issued 2,69,96,734 equity shares of face value of Re. 1/- each at
an issue price of Rs.185.5 per share (including securities premium of Rs.184.5 per share) aggregating to
Rs. 500.79 crore under Qualified Institutions Placement (‘QIP’).
Consequent to allotment of aforesaid equity shares on October 11, 2024, the paid-up equity share capital
of the Company stands increased Rs.269.97 lakhs, consisting of 2,69,96,734 Equity Shares of Re. 1/- each.
The total offer expenses in relation to the fresh issue were Rs. 27.50 crore (excluding taxes). The utilization
of QIP proceeds (net of QIP related expense of Rs. 473.29 crore) is summarized below:
* As per the Placement Document, the utilisation of Remaining Rs.4400.00 Lakhs for the Capex object
will be utilised upto March 31, 2027. Remaining unutilised net proceeds of Rs.4400.00 lakhs as on date
have been temporarily invested in deposits with scheduled banks and kept in current account with
scheduled bank.
48 Events after the Reporting Period : Nil
49 The figures for the corresponding previous year have been regrouped / reclassified wherever
necessary, to make them comparable
50 Approval of Financial Statements
The Financial Statements were approved for issue by the Board of Directors on May 28, 2026.
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