h) Provisions and contingent liabilities
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. 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.
Contingent Liabilities are disclosed in respect of possible obligations that arise from past events but their existence will
be confirmed by the occurrence or non occurrence of one or more uncertain future events not wholly within the control
of the Company or where any present obligation cannot be measured in terms of future outflow of resources or where a
reliable estimate of the obligation cannot be made.
i) Revenue recognition of Income & Expenditure
Revenue from sales of products is recognized on transfer of all significant risk and rewards of ownership of the product on to
j) customer, which is generally on dispatch of goods. Sales are stated net of deductions during the year and exclusive of Value Added
Tax and excise duty.
I ii) Revenue from Rental Income is reconginised as per the agreement with the concerned party,
j) Employee Benefit
Liability in respect of employee benefits are accounted for as follows :
sf m4ai \£\\
B. Retirement Benefit
Retirement benefit in the form of Provident Fund, which are defined Contribution plans, are accounted on accrual basis and
') charged to the Statement of Profit and Loss of the year.
ii) The liability in respect of accumulated leave is accounted on accrual.
The Company has only three employees as at the close of the current year, hence the gratuity liability has been calculated on
discontinuation basis instead of an Actuarial Valuation, as the amounts Involved are not material.
k) Operating Expenses:
The Company classifies separately operating expenses which are directly linked to main activities of the company.
l) Taxation :
Current Tax is determined as the amount of tax payable in respect of taxable income for the year, computed in accordance with
1 the applicable provisions of income tax Act, 1961.
Deferred Tax resulting from timing difference between taxable and accounting income is accounted for using the tax rates and laws
ii) that have been enacted or substantively enacted by the balance sheet date. Deferred Tax Asset is recognized and carried forward
only if there is reasonable certainty of its realisation.
m) Impairment of non-financial assets:
Goodwill and intangible assets that have an indefinite useful life are not subject to amortisation and are tested annually for
impairment,or more frequently if events or changes in circumstances indicate that they might be impaired. Other assets are tested
for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An
impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The
recoverable amount is the higher of an asset's fair value less costs of disposal and value in use. For the purpose of assessing
impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows which are largely
independent of the cash inflows from other assets or group of assets (cash-generating units). Non-financial assets other than
goodwill that suffered an impairment are reviewed for possible reversal of the impairment at the end of each reporting period.
31 Segment Reporting
The Company has only one reportable segment i.e. Cold drawn Seamless Pipes and Tubes. Accordingly, the Company is single segment company in
terms of its products.
Considering the nature of business of Company in which it operates, the Company deals within India, hence other disclosure requirements are not
applicable to the company.
32 Dues to Micro. Small and Medium enterprises
The Company has not received any intimation from 'suppliers' regarding their status under the Micro, Small and Medium enterprises Development Act,
2006 and hence disclosures, if any relating to amount unpaid as at the year end together with interest paid/payable as required under the said Act have
not been furnished.
33 Post retirement benefit plans
The Company has only three employees as at the close of the current year, hence the gratuity liability has been calculated on discontinuation basis
instead of an Actuarial Valuation, as the amounts involved are not material.
The Company s financial risk management is an integral part of how to plan and execute its business strategies. The Companys financial risk management policy is set by the Managing Board.
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 equity prices and
other market changes that affect market risk sensitive instruments, change as a result of changes in the interest rates, foreign currency exchange rates, Market risk is attributable to all market risk sensitive
financial instruments including receivables, payables and loans and borrowings.
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. In order to optimize the Company's position with regards
to interest income and interest expenses and to manage the interest rate risk, treasury performs a comprehensive corporate interest rate risk management by balancing the proportion of fixed rate and floating
rate financial instruments in its total portfolio.
According to the Company interest rate risk exposure is only for floating rate borrowings. For floating rate liabilities, the analysis is prepared assuming the amount of the liability outstanding at the end of the
reporting period was outstanding for the whole year. A 50 basis point increase or decrease is used when reporting interest rate risk internally to key management personnel and represents management's
assessment of the reasonably possible change in interest rates.
I) Actual or expected significant adverse changes in business cons.ders
!!i|AFinanlr,eXPeCted Sienificant cha"e«Ý" «* operating remits of the counterparty,
v)Signnfi Te™in hn^d^instrumenatrofntheTatrnecounterprrtCy)UnterF'3rtVS mee'itS °bnga'i0nS'
Significant changes in the value of the collateral supporting the obligation or in the quality of the third-party guarantees or credit enhancements.
provision when a debtor fails to T/T C°mPanV'C°mP3nV Categorises a '°an or receivable «
to recover the receivable due. Where recoveries are made, these are recognized in statement of profit and loss C°mP3nV C°minUeS "g,gein e",orcemen' activity to attempt
Loss rates are based on actual credit loss experien« and'“d" tesS’on'T^ °P*ra,es.
Liquidity Risk
Liquidity risk is defined as the risk that the company will not be able to settle or meet its obligations on time, or at a reasonable price. Due to dynamic nature of underlying business the Comoanv's treasnn,
department is responsible for liquidity, funding as well as settlement management. In addition, processes and policies related such risk are overseen by senior management. Management monitors the
(i) Financing arrangements
The company had access to following undrawn Borrowing facilities at end of reporting period:
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