2.13 PROVISIONS AND CONTINGENT LIABILITIES
a) Provisions
Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past
event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation
and a reliable estimate can be made of the amount of the obligation. When the Company expects some or all of a
provision to be reimbursed, for example, under an insurance contract, the reimbursement is recognised as a
separate asset, but only when the reimbursement is virtually certain. The expense relating to a provision is presented
in the Statement of Profit and Loss net of any reimbursement. Provisions are not recognised for future operating
losses.
Provisions are measured at the present value of management’s best estimate 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.
b) Contingent Liability
Contingent liabilities are not provided for and if material, are disclosed by way of notes to accounts. Contingent
Liability is disclosed in the case of:
i. A present obligation arising from the past events, when it is not probable that an outflow of resources will be
required to settle the obligation;
ii. A present obligation arising from the past events, when no reliable estimate is possible;
iii. A possible obligation arising from the past events, unless the probability of outflow of resources is remote.
2.14 EARNING PER SHARE
Basic Earnings Per Share
Basic Earnings Per Share is calculated by dividing the profit attributable to owners of the Company by the weighted
average number of equity shares outstanding during the period. Earnings considered in ascertaining the company's
earnings per share is the net profit for the period after deducting preference dividends, if any, and any attributable
distribution tax thereto for the period.
2.15 CASH AND CASH EQUIVALENTS
Cash and Cash Equivalents comprise cash and deposits with banks. The Company considers all highly liquid investments
with a remaining maturity at the date of purchase of three months or less and that are readily convertible to known of cash to
be cash equivalents.
For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash on hand, deposits
held at call with financial institutions and other short term, highly liquid investments with original maturities of three months
or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in
value.
2.16 STATEMENT OF CASH FLOWS
Cash Flows are reported using the indirect method, whereby profit before tax is adjusted for the effects of transactions of a
non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or
expenses associated with investing or financing Cash Flows. The cash flows from operating, investing and financing
activities of the Company are segregated.
Cash and cash equivalents for the purpose of Cash Flow Statement comprise cash and cheques in hand, bank balances,
demand deposits with banks where the original maturity is three months or less and other short term highly liquid
investments net of bank overdrafts which are repayable on demand as these form an integral part of the Company’s cash
management.
2.17 DIVIDEND
The Company recognises a liability for dividends to equity holders of the Company when the dividend is authorised and the
dividend is no longer at the discretion of the Company. As per the corporate laws in India, a dividend is authorised when it is
approved by the shareholders. A corresponding amount is recognised directly in equity.
2.18 ROUNDING OFF
All amounts disclosed in the financial statements and notes have been rounded off to the nearest lakhs, unless otherwise
stated.
2.19 EVENTS OCCURING AFTER THE REPORTING DATE
Adjusting events (that provides evidence of condition that existed at the balance sheet date) occurring after the balance
sheet date are recognized in the financial statements. Material non adjusting events (that are inductive of conditions that
arose subsequent to the balance sheet date) occurring after the balance sheet date that represents material change and
commitment affecting the financial position are disclosed in the Directors’ Report.
2.20 EXCEPTIONAL ITEMS
Certain occasions, the size, type or incidence of an item of income or expense, pertaining to the ordinary activities of the
Company is such that its disclosure improves the understanding of the performance of the Company, such income or
expense is classified as an exceptional item and accordingly, disclosed in the notes accompanying to the financial
statements.
2.21 OPERATING CYCLE
All assets and liabilities have been classified as current or non-current as per each Company's normal operating cycle and
other criteria set out in the Schedule III to the Act
2.22 SEGMENT REPORTING
The company has single business segment viz. Manufacturing & Trading of Stainless Steel & Allied Products, therefore in
the context of Ind AS 108 disclosure of segment is not applicable.
2.23 LEASES
At the inception it is assessed, whether a contract is a lease or contains a lease. A contract is a lease or contains a lease if it
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, company assesses whether the
contract involves the use of an identified asset. Use may be specified explicitly or implicitly.
- Use should be physically distinct or represent substantially all of the capacity of a physically distinct asset.
- If the supplier has a substantive substitution right, then the asset is not identified.
- Company has the right to obtain substantially all of the economic benefits from use of the asset throughout the period
of use
- Company has the right to direct the use of the asset.
- In cases where the usage of the asset is predetermined the right to direct the use of the asset is determined when the
company has the right to use the asset or the company designed the asset in a way that predetermines how and for
what purpose it will be used.
- At the commencement or modification of a contract, that contains a lease component, company allocates the
consideration in the contract, to each lease component, on the basis of its relative standalone prices. For leases of
property, it is elected not to separate nonlease components and account for the lease and non-lease components as
a single lease component.
a) Company as a Lessee
Company recognizes a right-of-use asset and a lease liability at the lease commencement date.
Right-of-use asset (ROU):
The right-of-use asset is initially measured at cost. Cost comprises of the initial amount of the lease liability adjusted
for any lease payments made at or before the commencement date, any initial direct costs incurred by the lessee, an
estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which
it is located less any lease incentives received
Right-of-use asset is depreciated using straightline method from the commencement date to the end of the lease
term. If the lease transfers the ownership of the underlying asset to the company at the end of the lease term or the
cost of the right-of-use asset reflects company will exercise the purchase option, ROU will be depreciated over the
useful life of the underlying asset, which is determined based on the same basis as property, plant and equipment.
Lease liability:
Lease liability is initially measured at the present value of lease payments that are not paid at the commencement
date. Discounting is done using the implicit interest rate in the lease, if that rate cannot be readily determined, then
using company’s incremental borrowing rate. Incremental borrowing rate is determined based on entity’s borrowing
rate adjusted for terms of the lease and type of the asset leased.
Lease payments included in the measurement of the lease liability comprises of fixed payments (including in
substance fixed payments), variable lease payments that depends on an index or a rate, initially measured using the
index or rate at the commencement date, amount expected to be payable under a residual value guarantee, the
exercise price under a purchase option that the company is reasonably certain to exercise, lease payments in an
optional renewal period if the company is reasonably certain to exercise an extension option, and penalties for early
termination of a lease unless the company is reasonably certain not to terminate early.
Lease liability is measured at amortised cost using the effective interest method. Lease liability is re-measured when
there is a change in the lease term, a change in its assessment of whether it will exercise a purchase, extension or
termination option or a revised in-substance fixed lease payment, a change in the amounts expected to be payable
under a residual value guarantee and a change in future lease payments arising from change in an index or rate.
When the lease liability is re-measured corresponding adjustment is made to the carrying amount of the rightof- use
asset. If the carrying amount of the right-of-use asset has been reduced to zero it will be recorded in statement of profit
and loss.
Company has elected not to recognise right-of-use assets and lease liabilities for short term leases. The lease
payments associated with these leases are recognised as an expense on a straight-line basis over the lease term.
b) Company as a Lessor
Leases in which the Company does not transfer substantially all the risks and rewards of ownership of an asset are
classified as operating leases. Rental income from operating lease is recognised on a straight-line basis over the
term of the relevant lease. Where the rentals are structured solely to increase in line with expected general inflation to
compensate for the Company’s expected inflationary cost increases, such increases are recognised in the year in
which such benefits accrue.
Leases are classified as Finance leases when substantially all of the risks and rewards of ownership transfer from the
Company to the lessee. Amounts due from lessees under finance leases are recorded as receivables at the
Company’s net investment in the leases. Finance lease income is allocated to accounting periods so as to reflect a
constant periodic rate of return on the net investment outstanding in respect of the lease.
2.24 STANDARDS ISSUED BUT NOT YET EFFECTIVE
Indian Accouting Standards:
Ministry of Corporate Affairs (“MCA”) notifies new standard or amendments to the existing standards. There is no such
notification which would have been applicable from 1 April, 2021.
Schedule III of the Companies Act 2013:
On March 24, 2021, the Ministry of Corporate Affairs (“MCA”) through a notification, amended Schedule III of the
Companies Act, 2013. The amendments revise Division I, II and III of Schedule III and are applicable from April 1,2021.
Key amendments relating to Division II which relate to companies whose financial statements are required to comply with
Companies (Indian Accounting Standards) Rules 2015 are:
Balance Sheet:
• Lease liabilities should be separately disclosed under the head ‘financial liabilities’, duly distinguished as current or
non current.
• Certain additional disclosures in the statement of changes in equity such as changes in equity share capital due to
prior period errors and restated balances at the beginning of the current reporting period.
• Specified format for disclosure of shareholding of promoters.
• Specified format for ageing schedule of trade receivables, trade payables, capital work-in-progress and intangible
asset under development.
• If a company has not used funds for the specific purpose for which it was borrowed from banks and financial
institutions, then disclosure of details of where it has been used.
• Specific disclosure under ‘additional regulatory requirement’ such as compliance with approved schemes of
arrangements, compliance with number of layers of companies, title deeds of immovable property not held in name of
company, loans and advances to promoters, directors, key managerial personnel (KMP) and related parties, details
of benami property held etc.
Statement of profit and loss:
• Additional disclosures relating to Corporate Social Responsibility (CSR),undisclosed income and crypto or virtual
currency specified under the head ‘additional information’ in the notes forming part of the standalone financial
statements.
The amendments are extensive and the Company will evaluate the same to give effect to them as required by law.
Nature and Purpose of the Reserves:-
Capital Share Redemption Reserve
Capital redemption reserve is created due to redemption of preference share capital in earlier years as per the requirement of the Companies
Act.
Securities Premium
Security premium reserve is created when shares are issue at premium.The reserve is utilised in accordance with the provisions of the
companies Act, 2013.
Capital Reserve
The Capital reserve was created to recognised the gain due to CDR scheme to the extent of Rs.44.51 cr approved by RCIL as on 31st March
2008 and gain due to increse in the value of Tangible asstes of Rs.74.13 cr as on 31st March 2015 and same was transferred to retained
earning.
General Reserve
The Company has transferred a portion of Net Profits of the Company before declaring Dividends to General Reserve pursuant to the earlier
provision of The Companies Act, 1956. Mandatory transfer to General Reserve, is not required under the Companies Act, 2013.
A Loans Repayable on Demand / Term Loan (Banks)
1 Kotak Mahindra Bank Limited had sanctioned various credit facilities to the Company, including Cash Credit Facilities, Letter of Credit
Facilities, Funded Interest Term Loan (FITL) and Emergency Credit Line Guarantee Scheme (ECLGS) facilities. These facilities were
secured by a first pari passu charge on the fixed assets of the Company, hypothecation of stocks and book debts, Plant & Machinery,
Factory Land and Building of the Company, along with personal guarantees provided by certain promoter-directors.
The aforesaid loan accounts had become Non-Performing Assets (NPAs) prior to and as on the Balance Sheet date. Consequently, the
Company received recall notices from the respective lenders demanding repayment of the outstanding dues.
Subsequently, Kotak Mahindra Bank Limited took possession of the Company's factory premises situated at Zenith Compound, Village
Vihari, Taluka Khalapur, District Raigad.
Thereafter, the Company entered into a Loan Consent Agreement dated 30th September 2024 with Kotak Mahindra Bank Limited for full
and final settlement of the outstanding dues.
The Company duly paid the entire settlement amount in terms of the Loan Consent Agreement on 25th August 2025. Pursuant thereto,
Kotak Mahindra Bank Limited issued a No Objection Certificate (NOC) dated 07th October 2025 confirming that all dues and liabilities of
the Company in respect of the aforesaid credit facilities had been fully paid and settled and that no amount remained outstanding against
the Company.
Accordingly, the charge created in favour of Kotak Mahindra Bank Limited has been satisfied, and the requisite satisfaction of charge has
been filed with the Registrar of Companies (ROC).
2 DNS Bank Limited had sanctioned Cash Credit facilities and FITL Loan to the Company against security comprising a first pari passu
charge on the fixed assets of the Company, hypothecation of stocks and book debts, Plant & Machinery, Factory Land and Building of the
Company, along with personal guarantees provided by certain promoter directors of the Company.
The aforesaid loan accounts were classified as Non-Performing Assets (NPAs) prior to and as on the Balance Sheet date.
Pursuant to an Assignment Agreement dated 30th April 2024, DNS Bank Limited assigned and transferred all its rights, title, interest,
benefits and obligations in respect of the debt due from the Company, together with the underlying financing documents, securities and
enforcement rights, to J.C. Flowers Asset Reconstruction Private Limited ("JC Flowers ARC").
Consequently, J.C. Flowers Asset Reconstruction Private Limited stepped into the shoes of DNS Bank Limited and became entitled to
exercise and enforce all rights, remedies and security interests available in relation to the said credit facilities.
Accordingly, the outstanding dues originally owed to DNS Bank Limited and subsequently assigned to J.C. Flowers Asset
Reconstruction Private Limited continue to be recognized in the books of the Company and are being dealt with in accordance with the
terms of the Assignment Agreement and the applicable provisions of law.
B Term Loans Financial Institutions (NBFC) :-
1 Loans from Sundaram Finance Ltd. @ 7.10% p.a. interest are secured against hypothecation of komatsu hydraulic excavator machine.
However the company has defaulted in repaying the same as per the agreed sanctioned terms.
C Unsecured Loan :-
1 Unsecured Loan from other corporate are repayable on demand. Interest rate @ 8.00 % p.a.
i. Based on the information in possession with the Company, no supplier has been identified as being covered under Micro, Small and
Medium Enterprise Development Act, 2006 ("the Act"). Accordingly, In view of the above outstanding as at 31st March 2026 the same has
not been quantified relating to Micro and Small Enterprises referred to in the said Act.
ii. The balances of trade payable for the amount due to some of them are subject to reconciliation. Necessary adjustment if any, may be
made when the acconts are settled.
iii. Trade Payables Includes related party refer Note No. 42.
(i) It is not practicable for the Company to estimate the timings of cash outflows, if any, in respect of the above pending resolution of the
respective proceedings as it is determinable only on receipt of judgments/decisions pending with various forums/authorities.
(ii) The Company does not expect any reimbursements in respect of the above contingent liabilities.
(iii) Most of the issues of litigation pertaining to Central Excise/Sales Tax/Customs are based on interpretation of the respective Law & Rules
thereunder. Management has been opined by its counsel that many of the issues raised by revenue will not be sustainable in law as they
are covered by judgments of respective judicial authorities which supports its contention.
(iv) The Company’s pending litigation comprise of proceeding pending related to Property tax. The Management 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 Management does not expect the outcome of these proceedings to have a materially adverse
effect on its financial results.
The Company's objective for Capital Management is to maximise shareholder value, safeguard business continuity, and support the growth of
the Company. Capital includes, Equity Capital, Securities Premium and other reserves and surplus attributable to the equity shareholders of
the Company. The Company determines the capital requirement based on annual operating plans and long term and strategic investment and
capital expenditure plans. The funding requirements are met through a mix of equity, operating cash flows generated and debt. The operating
management, supervised by the Board of Directors of the Company regularly monitors its key gearing ratios and other financials parameters
and takes corrective actions wherever necessary. The relevant quantitative information on the aforesaid parameters are disclosed in these
financial statements.
The Company's financial risk management is an integral part of how to plan and execute its business strategies. The Company's financial risk
management policy is set by the managing board. The details of different types of risk and management policy to address these risks are listed
below:
(a) Market Risk:-
Market risk is the risk of loss of future earnings, fair values or 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 a result of changes in the interest rates, foreign currency exchange rates, equity
prices and other market changes that affect market risk sensitive instruments. Market risk is attributable to all market risk sensitive financial
instruments including investments and deposits , foreign currency receivables, payables and loans and borrowings. The objective of market
risk management is to avoid excessive expsoure in our foreign currency revenues and costs.
(a) (i) Market Risk - Interest Rate Risk
Interest rate risk is the risk that the fair value of future cash flows of the financial instruments will fluctuate because of changes in market interest
rates. The company's exposure to the risk of changes in market interest rates primarily to the Company's borrowings, both short term and long
term obligations with floating interest rates.
The company is also exposed to interest rate risk on its financial assets that include fixed deposits (which are part of cash and cash equivalents)
since all these are generally for short durations, there is no significant interest rate risks pertaining to these deposits.
Sensitivity analysis to interest rate risk
The company doesn’t account for any fixed rate financial assets or financial liabilities at fair value through profit or loss. Therefore, a change in
interest rates at the reporting date would not affect profit or loss.
(a)(ii) Market Risk - Price Risk
The Company has no surplus for investment in debt mutual funds, deposits etc. The Company does make deposit with the banks to provide
security against gurantee issued by bank to companys trade payables. Deposit is made in fixed rate instrument. In view of this it is not
susceptible to market price risk, arising from changes in interest rates or market yields which may impact the return and value of the
investments.
(a)(iii) Market Risk - Currency Risk
The fluctuation in foreign currency exchange rates may have a potential impact on the statement of profit and loss and equity, where any
transaction references more than one currency or where assets/liabilities are denominated in a currency other than the functional currency of
the Company. The company is exposed to currency risk on account of its trade payables in foreign currency. The functional currency of the
company is Indian Rupees. The Company follows a natural hedge driven currency risk mitigation policy to the extent possible.
Exposure to Currency risk
The summary quantitative data about the Company's exposure to currency risk are reported to management of the company are as follows:-
Credit Risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual
obligations, and arises principally from the Company's receivables from customers. The carrying amount of Financial Assets represents the
maximum credit exposure.
Trade Receivables
The Company has established a credit policy under which each new customer is analysed individually for creditworthiness before the payment
and delivery terms and conditions are offered. The Company’s review includes external ratings, if they are available, financial statements,
industry information, business intelligence and in some cases bank references.
Trade Receivables of the Company are typically unsecured ,except to the extent of the security deposits received from the customers or
financial guarantees provided by the market organizers in the business. Credit Risk is managed through credit approvals and periodic
monitoring of the creditworthiness of customers to which the Company grants credit terms in the normal course of business. The Company
performs ongoing credit evaluations of its customers’ financial condition and monitors the creditworthiness of its customers to which it grants
credit terms in the normal course of business. The Company has no concentration of Credit Risk as the customer base is geographically
distributed in India.
Expected credit loss for trade receivable:
The allowance for impairment of Trade receivables is created to the extent and as and when required, based upon the expected collectability of
accounts receivables. On account of adoption of Ind AS 109, the Company uses lifetime Expected Credit Loss (ECL) model for assessing the
impariment loss. For this purpose, the Company uses a provision matrix to compute the expected credit loss amount for trade receivables. Loss
rates are based on actual credit loss experience and past trends. The provision matrix takes into account external and internal credit risk factors
and historical experience / current facts available in relation to defaults and delays in collection thereof.
The movement of the expected loss provision (allowance for bad and doubtful loans and receivables etc.) made by the company are as under:
Other Financial Assets
The company maintains its Cash and Cash equivalents and Bank deposits with banks having good reputation, good past track record and high
quality credit rating and also reviews their credit-worthiness on an on-going basis.
Expected credit loss on financial assets other than trade receivable:
With regards to all financial assets with contractual cash flows other than trade receivable, management believes these to be high quality
assets with negligible credit risk. The management believes that the parties from whom these financial assets are recoverable, have strong
capacity to meet the obligations and where the risk of default is negligible and accordingly no provision for expected credit loss has been
provided on such financial assets. Break up of financial assets other than trade receivables have been disclosed on balance sheet.
The Company’s maximum exposure to credit risk as at 31st March, 2026 and 31st March, 2025 is the carrying value of each class of financial
assets.
Liquidity Risk is the risk that the Company will face in meeting its obligation associated with its financial liabilities that are settled by delivering
cash or another financial asset. The Company's approach in managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity
to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the
Company's reputation. Any short term surplus cash generated, over and above the amount required for working capital and other operational
requirements is retained as Cash and Cash Equivalents (to the extent required).
Exposure to Liquidity Risk
The following table shows the maturity analysis of the Company's Financial Liabilities based on contractually agreed undiscounted cash flows
along with its carrying value as at the Balance Sheet Date.
Notes:-
(a) Related party relationship is idetified by the management and relied upon by the auditors.
(b) Amount in respect of related parties have been made provisions for doubtful debts of Rs.1232.30 lakhs.
(c) Provision for contribution to gratuity fund which are made based on actuarial valuation on overall company basis are not included in
remunaration to Key magement Personnel.
(d) Mr. Sudhir Gupta (Executive Chairman) & Mr. Varun Gupta (Managing Director) have been provided the personal guarantee for the
working capital borrowing by the company from M/s. Kotak Mahindra Bank Ltd. & M/s Dombivali Nagari Sahakari Bank Ltd..
43 Loans given, Investments made and Corporate Guarantees given u/s 186(4) of the Companies Act, 2013 are disclosed under the
respective notes.
44 Segment Reporting :
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The
chief operating decision maker of the Company is responsible for allocating resources and assessing performance of the operating
segments.
46 Balances of Trade Receivables, Trade Payables, Advances and Deposits received / given, from / to customers are subject to confirmation
and subsequent reconcilation.
47 Figures in Brackets indicate previous years figures. Previous periods figure have been regrouped, rearranged, reclassified wherever
necessary to correspond with those of the current period.
|