s. Provision and contingencies
A provision is recognised if as a result of past event the company has a present legal or constructive obligation
that is reasonably estimated and it is probable that an outflow of resources will be required to settle the
obligation. Provisions are determined by discontinuing the expected cash flow at a pre-tax rate that reflects
current market assessments of the time value of the money and the risk specific to the liabilities. When
discounting is used, the increase in the provision due to the passage of time is recognised as a borrowing cost.
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.
Contingent liabilities, if material, are disclosed by way of notes to the accounts. These are reviewed at each
balance sheet date and adjusted to reflect the current management estimate.
Contingent assets are not recognised in the Financial Statements, as they are dependent on the outcome of
legal or other processes.
t. Segment reporting
Operating segments are those components of the business whose operating results are regularly reviewed by
the chief operating decision making body in the Company to make decisions for performance assessment and
resource allocation. The reporting of segment information is the same as provided to the management for the
purpose of the performance assessment and resource allocation to the segments. The Company's operating
business predominantly relates to manufacturing of Iron & Steel and allied products.
36. EMPLOYEE BENEFITS
36.1 Defined contribution plans
The Company participates in a number of defined contribution plans on behalf of relevant personnel. Any expense
recognised in relation to these schemes represents the value of contributions payable during the period by them at
rates specified by the rules of those plans. The only amounts included in the Balance Sheet are those relating to the
prior month's contributions that were not due to be paid until after the end of the reporting period.
Provident fund
In accordance with Indian law, eligible employees of K I C Metaliks Limited are entitled to receive benefits in
respect of provident fund, a defined contribution plan, in which both employees and the Company make
monthly contributions at a specified percentage of the covered employees' salary (currently 12% of employees'
salary). During the year, the company has recognised ' 133.91 lakhs (2023-24: ' 128.22 lakhs) as contribution in the
Statement of Profit and Loss.
Employees' state insurance
In accordance with Indian law, eligible employees of K I C Metaliks Limited are entitled to receive benefits in respect
of employee's state insurance, a defined contribution plan, in which both employees and the Company make
monthly contributions at a specified percentage of the covered employees' salary (currently 4.75% of employees'
salary). During the year, the company has recognised ' 34.01 lakhs (2023-24: ' 33.61 lakhs) as contribution in the
Statement of Profit and Loss.
36.2 Defined benefit plans
Gratuity
The Company has an obligation towards gratuity, a defined benefit retirement plan covering eligible employees.
The plan provides for a lump-sum payment to vested employee's at retirement, death while in employment or on
termination of employment.The amount of gratuity payable is the employee's last drawn basic salary per month
computed proportionately for 15 days salary multiplied by the number of years of service completed. Vesting occurs
upon completion of five years of service. The Company accounts for the liability for gratuity benefits payable in the
future based on an actuarial valuation. The Company is exposed to liquidity risk, salary escalation risk, demographic
risk and regulatory risk.
i. 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.
ii. 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 oblgation will have a
bearing on the plan's liabilty.
iii. 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.
iv. 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 ' 20,00,000).
The most recent actuarial valuation of the plan assets and the present value of the defined benefit obligation were
carried out as at 31.03.2025 by Kushwant Pahwa, Fellow of the Institute of Actuaries of India. The present value of the
defined benefit obligation, and the related current service cost and past service cost, were measured using the projected
unit credit method.
37.2 Capital management
The Company's objectives when managing capital are to:
• maximize the shareholder value;
• safeguard its ability to continue as a going concern;
• maintain an optimal capital structure to reduce the cost of capital; and
• ensure compliance with covenants related to its credit facilities.
The Board of Directors has the primary responsibility to maintain a strong capital base and reduce the cost of capital
through prudent management of deployed funds and leveraging opportunities in the financial markets so as to maintain
and sustain future development of the business.
The Company's capital management objective is to maintain an optimal debt-equity structure so as to reduce the cost
of capital, thereby enhancing returns to shareholders. The Company also has a policy of making judicious use of various
available debt instruments within its overall working capital drawing limit.
38. FINANCIAL RISK MANAGEMENT
The Company's principal financial liabilities comprises of loans and borrowings, trade and other payables. The main
purpose of these financial liabilities are to finance the Company's operations and to support its operations. The
Company's principal financial assets include trade and other receivables, and cash and short-term deposits that derive
directly from its operations.
The Company's business activities expose it to a variety of financial risks, namely credit risk, liquidity risk, market risk and
foreign currency risk.
the Company's policy is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities
when due, under both normal and stressed conditions as they fall due while minimizing finance costs, without incurring
unacceptable losses or risking damage to the Company's reputation.
38.1.3 Market Risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes
in market prices.
i) Foreign currency risk
Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in
foreign exchange rates. Any weakening of the functional currency may impact the Company's cost of imports and cost
of borrowings and consequently may increase the cost of financing the Company's capital expenditures. The Company
evaluates the impact of foreign exchange rate fluctuations by assessing its exposure to exchange rate risks.
The following table demonstrates the sensitivity in the USD & JPY to the Indian Rupee with all other variables held
constant. The impact on the Company's profit before tax due to changes in the fair values of monetary assets and
liabilities is given below:
38.1 Risk management framework
Managing Director and Chief Financial Officer of the Company evaluates and manages the uncertainties in the Company.
They conduct meetings at regular intervals involving other high level officers of the company and provides updates to
the Audit Committee / Board.
The management of financial risks by the Company is summarized below:
38.1.1 Credit risk
Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract,
leading to a financial loss. The Company is exposed to credit risk as a result of the risk of counterparties defaulting on
their obligations. The Company's exposure to credit risk primarily relates to investments, accounts receivable and cash
and cash equivalents. The Company monitors and limits its exposure to credit risk on a continuous basis. To manage this
the Company periodically reviews the financial reliability of its customers, taking into account the financial condition,
current economic trends and analysis of historical bad debts and ageing of accounts receivables.
38.1.2 Liquidity risk
The Company is exposed to liquidity risk related to its ability to fund its obligations as they become due. The Company
monitors and manages its liquidity risk to ensure access to sufficient funds to meet operational and financial requirements.
The Company has access to credit facilities and monitors cash balances daily. In relation to the Company's liquidity risk,
ii) Interest rate risk
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 manages its interest risk exposure relating to the financial instrument
classified at amortised cost by using the market interest rate as the effective interest rate and the changes in the assets
liabilities is accounted for as interest income / expenses with respect to financial assets / financial liabilities respectively.
The Company however has only fixed interest rate term loan.
As there is no primary exposure to the interest rate risk the sensitivity analysis has not been performed by the Company.
Explanation for the change in ratio by more than 25% :
1. The Debt service coverage ratio has decreased due to decrease in earnings during the current year.
2. The Return on equity ratio has decreased due to decrease in earnings during the current year.
3. The Inventory turnover ratio has increased primarily on account of decrease in revenue during the current year.
4. The Trade receivables turnover ratio has increased due to increase in receivables during the year
5. The Trade payables turnover ratio has increased due to increase in trade payables during the year.
6. The Net profit ratio has decreased due to decrease in margin during the current year.
7. The Return on capital employed has decreased due to decrease in operating profits during the current year.
41. OTHER STATUTORY INFORMATION
i) The Company does not have any benami property, where any proceeding has been initiated or pending against the
Company for holding any benami property.
ii) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
iii) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign
entities (Intermediaries) with the understanding that the Intermediary shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on
behalf of the Company (ultimate beneficiaries) or
(b) provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries
iv) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (funding party)
with the understanding (whether recorded in writing or otherwise) that the Company shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on
behalf of the funding party (ultimate beneficiaries) or
(b) provide any guarantee, security or the like on behalf of the ultimate beneficiaries.
v) The Company does not have any such transaction which is not recorded in the Books of Accounts that has been
surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as,
search or survey or any other relevant provisions of the Income Tax Act, 1961).
vi) The Company has complied with the number of layers prescribed under Clause (87) of Section 2 of the Act read with
the Companies (Restriction on number of Layers) Rules, 2017.
vii) The Company is not declared wilful defaulter by any bank or financial institution or lender during the year.
viii) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory
period.
ix) The Company has used the borrowings from banks and financial institutions for the specific purpose for which it
was obtained.
x) The title deeds of all the immovable properties, (other than immovable properties where the Company is the
lessee and the lease agreements are duly executed in favour of the Company) disclosed in the Financial Statements
included in property, plant and equipment and capital work-in progress are held in the name of the Company as at
the balance sheet date.
xi) The Company does not have any transactions with Companies which are struck off.
xii) The Company has not given any loans or advances to Promoters, Directors, KMP's and related parties (as defined
under Companies Act, 2013), either severally or jointly with any other person.
42. The Company has used accounting software for maintaining its books of account which has a feature of recording
audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in
the software. Further, no instance of audit trail feature being tampered with was noted in respect of software.
43. Previous year's figure have been re-grouped / re-classified wherever necessary.
In terms of our report of even date attached For and on behalf of the Board of Directors
For Agarwal Maheswari & Co. Radhey Shyam Jalan
Chartered Accountants Chairman & Managing Director
Firm Registration No. 314030E (DIN: 00578800)
Dhanpat Ram Agarwal
Partner
Membership No. 051484 Mukesh Bengani Ruchika Fogla Manjula Poddar
Place: Kolkata Director (Finance) & CFO Company Secretary Director
Dated: The 21st day of May, 2025 (DIN: 08892916) (ACS: 23339) (DIN: 08158445)
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