3.13 Provisions, Contingent Liabilities and Contingent Assets
(a) Provisions
Provisions for legal claims are recognized 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 recognized 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 recognized 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 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
isrecognized as interest expense.
b) 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 or a reliable estimate of the amount cannot be made.
(c) Contingent Assets
Contingent Assets are disclosed, where an inflow of economic benefits is probable.
4 CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY
The preparation of the Company's Financial Statements requires management to make judgement, estimates and assumptions
that affect the reported amount of revenue, expenses, assets and liabilities and the accompanying disclosures. Uncertainty
about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount
of assets or liabilities affected in next financial years. This note provides an overview of the areas that involved a higher degree
of judgment 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 judgments is
included in relevant notes together with information about the basis of calculation for each affected line item in the standalone
financial statements.
(i) Estimation of useful life of Property, Plant and Equipment
Estimates are involved in determining the cost attributable to bringing the assets to the location and condition necessary
for it to be capable of operating in the manner intended by the management. Property, Plant and Equipment/Intangible
Assets are depreciated/amortised over their estimated useful life, after taking into account estimated residual value.
Management reviews the estimated useful life and residual values of the assets annually in order to determine the amount
of depreciation/ amortisation to be recorded during any reporting period. The useful life and residual values are based on
the Company's historical experience with similar assets and take into account anticipated technological and future risks.
The depreciation/ amortisation for future periods is revised if there are significant changes from previous estimates.
(ii) Estimation of Provision
The timing of recognition and quantification of the liability (including litigations) requires the application of judgement
to existing facts and circumstances, which can be subject to change. The carrying amounts of provisions and liabilities
are reviewed regularly and revised to take account of changing facts and circumstances. The Company writes down
inventories to net realizable value based on an estimate of the realizability of inventories. The identification of write-downs
requires the use of estimates of net selling prices of the down-graded inventories. Where the expectation is different from
the original estimate, such difference will impact the carrying value of inventories and write-downs of inventories in the
periods in which such estimate has been changed.
(iii) Estimated fair value of Financial Instruments
The fair value of financial instruments that are not traded in an active market is determined using valuation techniques.
The Management uses its judgment to select a variety of methods and make assumptions that are mainly based on market
conditions existing at the end of each reporting period.
(iv) Estimation of Contingent Liabilities
The Company exercises judgment in measuring and recognizing provisions and the exposures to contingent liabilities
which is related to pending litigation or other outstanding claims. Judgement is necessary in assessing the likelihood that
a pending claim will succeed, or a liability will arise, and to quantify the possible range of the financial settlement. Because
of the inherent uncertainty in this evaluation process, actual liability may be different from the originally estimated as
provision.
Nature and purpose of other equity
(i) Securities Premium
Securities premium is used to record the premium on issue of shares. The reserve is utilized in accordance with the
provisions of the Companies Act, 2013
(ii) General Reserve
General Reserve represents appropriation of profit by the Company. General reserve is created by a transfer from one
component of equity to another and is not an item of other comprehensive income.
(iii) Retained Earnings
Retained earnings comprises of prior years as well as current year's undistributed earnings after taxes.
(iv) Foreign currency transalation reserves
Foreign currency transalation reserves represents the cumulative effect of exchange rate fluctuations when translating
the financial statements of foreign branch into Indian reporting currency and it is an item of other comprehensive
income.
(v) Money received against share warrants
Money received against Share Warrants represents amounts received towards warrants which entitles the warrant holders
the option to apply for and be allotted equivalent number of equity shares of the face value of Rs.5/ each.
During the financial year 2023-24, the Company had issued to its Promoters Group 25,00,000 warrants at a price of Rs.
183.50 each entitling them for subscription of equivalent number of Equity Shares of Rs. 5 each (including premium of Rs.
178.50 each Share) under Regulation 28(1) of the SEBI (LODR) Regulations, 2015. The holder of the warrants would need to
exercise the option to subscribe to equity shares before the expiry of 18 months from the date of allotment made on 01st
December,2024 upon payment of the balance 75% of the consideration of warrants. The promoter Group has excercised
the option to convert the warrants into equity shares on 28 May 2025. Balance warrants pending as on March 31 2026 to
be exercised are Nil (Previous year: 25,00,000).
During the financial year 2025-26, the Company had issued to its Promoters Group 12,19,512 warrants at a price of Rs.
328 each entitling them for subscription of equivalent number of Equity Shares of Rs. 5 each (including premium of Rs.
323 each Share) under Regulation 28(1) of the SEBI (LODR) Regulations, 2015. The holder of the warrants would need to
Secured loans
1 State Bank of India - Foreign currency term loan
Nature of security :
i) First pari passu charge by leasehold land & building on Plot No. 258A (16500 Sq Mtr), 258C (15400 Sq Mtr), 257 B, 258
B (45277.67 Sq. Mtr), 269B (6908.50 Sq Mtr) and 258D (4821 Sq. Mtr), Industrial Area. Sector No.I, Pithampur District
Dhar (MP) - 454775, total admeasuring land area 88907.17 Sq. Mtr.
ii) First pari passu charge by Industrial Land & Building on Survey No. 485/2, 485/3, 485/4,485/5,495, 496, 497, 498, 499,
500, 502/1,502/2, Village Moti Khedop, Taluka - Anjar, Dist Kutch, Gujarat - 370130 total admeasuring land of area of
56 acres approx. 249076.40 Sq. mtrs.
iii) First hypothecation charge on entire movable assets including Plant & Machinery of the Company, both present and
future.
iv) Secong charge on of the entire current assets of the Company, both present and future except the stock and
receivables pertaining to the project specific limits sanction by other lenders.
v) Pledge of 65,00,000 shares of the Company by the promoters and 18,789 equity shares held in Merino Shelters Pvt.
Ltd.
1 Foreign currency loan includes
i Pre-Shipment Credit in Foreign Currency through Bank of India
Amount Outstanding: USD 19,80,000
Tenure: 180 days
Rate of Interest: 6m SOFR 1%
Maturity: 13.06.2026
Nature of security
i ) First pari passu charge along with other consortium lenders on the entire current assets of the compny, both
present and future, except the stock and receivables pertaining to the project specific limits sanctioned by the
lenders.
ii) Second pari passu charge mortgage on leasehold land & building on plot no- 258A (16500 Sq Mtr), 258C (15400
Sq Mtr) , 257 B, & 258B (45277.67 Sq Mtr) , 269B ( 6908.50 Sq Mtr) and 258D (4821 Sq Mtr) , Industrial Area, Sector
No-I , Pithampur District Dhar ( MP)- 454 775, Total admeasuring land area 88907.17 Sq mtr.
iii) Second pari passu charge mortgage on Industrial Land & building on Survey No. 485/2, 485/3, 485/4, 485/5,
495, 496,497,498,499,500,502/1, 502/2, Village Moti Khedoi, Taluka: Anjar, Dist: Kutch, Gujarat: 370130 Total
admeasuring land of area of 56 acres approx. 249076.40 Sq.mtrs.
iv) Second pari passu charge mortgage on Industrial Land & building on Survey No. 471/1,471/2, 472 at Village
Khedoi, Taluka: Anjar, Dist: Kutch, Gujarat: 370130 Total admeasuring land of area of 56 acres approx. 249085.40
Sq.mtrs.\
v) Second pari passu hypothecation charge on entire movable assets including plant and machinery incl windmill
at village Vanku, Taluka abdasa, kutch, Gujarat: 370130
vi) Pledge of 18,789 equity shares held in Merino Shelters Pvt. Ltd.
ii Pre-Shipment Financing under Export Orders in Foreign Currency through Standard Chartered Bank
Amount Outstanding: USD 43,11,585
Tenure: 80 days
Rate of Interest: 3m SOFR 1.75%
Maturity: 15.05.2026
Nature of security:
i ) Personal Guarantees of Promoters - Mr. Nikhil Mansukhani and Mr. Rameshchandra Mansukhani.
ii) Corporate Guarantee of Merino Shelters Pvt. Ltd.
iii) First and exclusive charge on inventory and receivables of Joint Development Agreement of a land parcel in Navi
Mumbai between Merino Shelters Pvt. Ltd and Paradise Developers
2 Working capital loan from banks including Cash credit and short term loan
State Bank of India
Nature of security
i ) First ranking pari passu hypotheation/ charge amongst the said Banks over the entire current assets of the Borrower,
including but not limited to the current assets stored and / or lying inside the Borrower's factories, godowns,
warehouses, offices, premises and such other places as approved by the said Banks from time to time, including
the stocks of raw materials, semi-finished and finished goods, stores and spares not relating to plant and machinery
(consumbale stores & spares), bill receivable and book debts, both present and future excluding such movables as
may be permitted by the said Banks from time to time (except the stock and receivables pertaining to the project
specific limits sanction by other lenders).
ii) Second pari passu charge mortgage/hypothecation/charge, as the case may be, on all the movable and immovable
fixed assets of the Borrower including the windmills located at Taluka Abdasa, Kutch in the State of Gujarat and the
movable and immovable fixed assets and properties located at:
(a) Plots of Land bearing Plot Nos., 257 B, 258A, 258B, 258 C, 258 D and 269 B situated at Industrial Area No.-1,
Pithampur, Distirct - Dhar in the State of Madhya Pradesh;
(b) Plot of land bearing Plot Nos., 485/2, 485/3, 485/4, 485/5, 495, 496, 497, 498, 499, 500, 502/1 and 502/2, situated
at Village - Khedoi, Taluka- Anjar, District - Kutch, in the state of Gujarat
iii) Pledge of 18,789 equity shares held in Merino Shelters Pvt. Ltd.
d On account of disputes pending adjudication before various judicial authorities regarding the title/ownership of the
shares and also the dispute regarding right to receive dividend on such shares between the two promoter shareholders
groups, the Company, based on the representations of both the groups, has obtained a legal opinion on this issue and
accordingly, the dividend of Rs. 503.03 lakhs for the FY 2014-15 to FY 2025-26 has been kept in abeyance in the unpaid
dividend account. The H'ble Bombay High Court has given its verdict in favour of the company, the same is challenged by
the aggrieved group before H'ble Supreme Court of India, pending admission.
34 Capital Management
Risk Management
The primary objective of the Company's capital management is to maximise shareholder value. The Company monitors capital
using debt-equity ratio which is calculated in Note 40.
The Company has a defined benefit gratuity plan in India, governed by the Payment of Gratuity Act, 1972. The
plan entitles an employee, who has rendered at least five years of continuous service, to gratuity at the rate of
fifteen day wages for every completed year of service or part thereof in excess of six months, based on the rate of
wages last drawn by the employee concerned upon retirement/termination. The gratuity plan is a funded plan
and the Company makes contributions to recognized funds in India.
This defined benefit plans expose the Company to actuarial risks, such as interest rate risk and market (investment)
risk.
B The Government of India has consolidated existing labour legislations into a unified framework comprising of four Labour
Codes collectively referred to as the 'New Labour Codes' with effect from November 21,2025. However, the corresponding
Rules under these New Labour Codes are yet to be notified. The Company has estimated and recorded past service cost
based on the best available information and review of the existing wage structure. The Company continues to monitor
the finalisation of Central/State Rules and clarifications on several aspects of the New Labour Codes and would provide
appropriate accounting effect based on such developments.
This section explains the judgements and estimates made in determining the fair values of the financial instruments that
are (a) recognized and measured at fair value and (b) measured at amortized 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. An
explanation of each level follows underneath the table.
The following table provides an analysis of financial instruments that are measured subsequent to initial recognition
at fair value, grouped into Level 1 to Level 3, as described below :
Level 1: This hierarchy includes financial instruments measured using quoted prices. The mutual funds are valued
using the closing NAV. The quoted market price used for financial assets held by the Company is the current bid price.
These instruments are included in level 1.
Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation
techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates.
The Company has derivatives which are not designated as hedges, bonds and government securities for which all
significant inputs required to fair value an instrument falls under level 2.
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in
level
(ii) Valuation technique used to determine fair value
Specific valuation techniques used to value financial instruments include:
- the fair value of forward contracts is determined using forward exchange rates prevailing with Authorised Dealers
dealing in foreign exchange.
- the use of Net Assets Value ('NAV') for valuation of mutual fund investment. NAV represents the price at which the
issuer will issue further units and will redeem such units of mutual fund to and from the investors.
- the fair value of bonds and government securities are derived based on the indicative quotes of price and yields
prevailing in the market or latest available prices.
a) The carrying amount of trade receivables, cash and cash equivalents, bank balances other than cash and cash
equivalents, loans, security deposits, other financial assets, borrowings, trade payables and other financial liabilities
are a reasonable approximation of their fair value, due to their short-term nature.
b) The fair values and carrying value of loans, security deposits, other financial assets, borrowings and other financial
liabilities (other than those covered in above note (a)) are materially the same.
Risk Management is an integral part of the business practices of the Company. The framework of Risk Management concentrates
on formalising a system to deal with the most relevant risks, building on existing Management practices, knowledge and
structures. The Company has developed and implemented a comprehensive Risk Management System to ensure that risks to
the continued existence of the Company as a going concern and to its growth are identified and remedied on a timely basis.
While defining and developing the formalised Risk Management System, leading standards and practices have been considered.
The Risk Management System is relevant to business reality, pragmatic and simple and involves the following:
i. Risk identification and definition - Focused on identifying relevant risks, creating, updating clear definitions to ensure
undisputed understanding along with details of the underlying root causes contributing factors.
ii. Risk classification - Focused on understanding the various impacts of risks and the level of influence on its root causes.
This involves identifying various processes generating the root causes and clear understanding of risk interrelationships.
iii. Risk assessment and prioritisation - Focused on determining risk priority and risk ownership for critical risks. This involves
assessment of the various impacts taking into consideration risk appetite and existing mitigation controls.
iv. Risk mitigation - Focused on addressing critical risks to restrict their impact(s) to an acceptable level (within the defined
risk appetite). This involves a clear definition of actions, responsibilities and milestones.
v. Risk reporting and monitoring - Focused on providing to the Board and the Audit Committee periodic information on risk
profile evolution and mitigation plans.
a) Management of liquidity risk
The Company's principal sources of liquidity are cash and cash equivalents, borrowings and the cash flow that is
generated from operations. The Company believes that current cash and cash equivalents, tied up borrowing lines
and cash flow that is generated from operations is sufficient to meet requirements. Accordingly, liquidity risk is
perceived to be low.
The following table shows the maturity analysis of the Company's financial liabilities based on contractually agreed
undiscounted cash flows as at the Balance sheet date:
The Company maintains exposure in cash and cash equivalents, term deposits with banks, and loans to subsidiary companies.
Individual risk limits are set for each counter-party based on financial position, credit rating and past experience. Credit limits
and concentration of exposures are actively monitored by the Treasury department of the Company.
Impact of hedging activities
The Company does not follow the hedge accounting in view of natural hedge.
Notes:
1 Total debt = Non-current borrowings and Current borrowings
2 Earning for debt service = Profit for the year Non-cash operating expenses like depreciation and other amortizations
Interest expenses
3 Debt service = Interest and principal repayments including lease payments
4 Cost of Goods Sold = Cost of material consumed Purchases of stock-in-trade Changes in inventories of finished goods,
stock-in-trade and work-in progress Manufacturing Expenses under Other Expenses
5 Working capital = Current assets (-) Current liabilities
6 Capital employed = Tangible net worth Total debt
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 no transactions with struck off companies .
iii The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory
period.
iv The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
v 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
vi 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 Group 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,
vii The Company has not 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
viii The Company has not revalued its property, plant and equipment (including right-of-use assets) or intangible assets
during the year ended March 31,2026.
ix Particulars of loan to Promoters,Directors,Key Managerial Personnel & Related Parties Which are repayable on demand are
given below :-
As required by section 186(4) of the Companies Act, 2013, the Company has disclosed the loan given, guarantee given or
security given under the respective head in the financial statements. Further, the loan given are for busniess purpose.
x The Company has not defaulted in repayment of loans, or other borrowings or payment of interest thereon to any lender.
xi The Company has not been declared willful defaulter by any bank, financial institution, government or government
authority.
xii The quarterly returns/statements filed by the Company with the banks are in agreement with the books of accounts of the
company.
42 During the financial year, a search and seizure operation was conducted by the Income Tax Department under Section 132 of
the Income Tax Act, 1961, at the premises of the Company. The Company extended its full cooperation to the authorities and
provided all the requisite information and documents. Pending the receipt of the final assessment orders / demand notices,
the Company is unable to ascertain the exact financial impact, if any. However, the management believes that no material
adjustments are required to be made in the financial statements in this regard.
43 During the FY 2021-22,the Securities and Exchange Board of India (SEBI) had initiated a forensic audit and based on
the report issued show cause notice to the Company. The Company filed the settlement application with SEBI and the
same was sub-judice before the Hon'ble Bombay High Court due to non-consideration of Settlement Application by SEBI.
However, the Company withdrew its writ petition filed in the above matter, pursuant to which SEBI scheduled a re-hearing.
Thereafter, SEBI passed its final order on September 29, 2025 ("SEBI Order")
As per the SEBI Order, SEBI imposed monetary penalty of Rs. 25 lakhs each on the Company, Ramesh Chandra Mansukhani
(Chairman & Director), Nikhil Mansukhani (Managing Director) and Ashok Gupta (Ex-Chief Financial Officer) ("Noticees").
Further, SEBI also restrained the above-mentioned noticees from accessing the securities market for a period of two years
from the date of the order. The Company challenged the SEBI Order before the Hon'ble Securities Appellate Tribunal ("SAT")
Thereafter, SAT vide its order dated October 10, 2025, directed the Company and three other noticees to create the Fixed
Deposits amounting to Rs. 12.50 lakhs each, with lien marked in favour of SEBI. SAT also granted stay on the entire SEBI Order
with immediate effect, including restraint from accessing the securities market.
44 The Company and Rameshchandra Mansukhani, Chairman, Mr. Nikhil Mansukhani, Managing Director and Mr. Ashok Gupta,
ex-CFO, ("Noticees") had received a notice from the Ministry of Corporate Affairs, Registrar of Companies, Mumbai under
Section 206(5) of the Companies Act, 2013 for various non-compliances under the Companies Act, 2013. In view of the above,
the Company and the above mentioned noticees had suo-moto filed compounding applications with the Ministry of Corporate
Affairs, Office of the Regional Director, Western Region, Mumbai.
Thereafter, Mr. Rameshchandra Mansukhani, Chairman, Mr. Nikhil Mansukhani, Managing Director and Mr. Ashok Gupta, ex-
CFO, received an interim order dated December 8, 2025 from the Ministry of Corporate Affairs, Office of the Regional Director,
Western Region, Mumbai and the payment of Rs. 3 lakhs in respect of the same was made in March 2026.
45 The Company is having single segment i.e. "Steel Pipes"
46 Events after the reporting period
a) The Company, through its subsidiary Man International Steel Industrial Company, Saudi Arabia, has successfully
completed the acquisition of a 100% stake in National Pipe Company Limited (NPC), Saudi Arabia on May 21,2026, for a
total consideration of USD 102 million (approximately INR 1,000 crores). The acquisition was financed through a mix of
internal accruals and external borrowings, comprising:
i USD 32 million funded from internal accruals, and
ii USD 70 million sourced through bank term loans.
b) Other than above, there were no events that occurred after the reporting period i.e. March 31, 2026 up to the date of
approval of the financial statements that require any adjustment to the carrying value of assets and liabilities.
47 Expected credit loss represents an allowance for life time expected loss on the carrying value of trade receivables, which has
been recognised in accordance with simplified approach as permitted by IND-As 109 - "Financial instruments"
48 Previous year's figures have been regrouped or reclassified to confirm to current year's presentation , wherever considered
necessary.
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