m) Provisions, Contingent Liabilities and Contingent Assets
A provision is recognised when the Company has a present obligation as a result of past events and
it is probable that an outflow of resources will be required to settle the obligation in respect of which
a reliable estimate can be made. Provisions (excluding retirement benefits) are not discounted to
their present value and are determined based on the best estimate required to settle the obligation
at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect
the current best estimates. Contingent liabilities are disclosed in the Notes. Contingent assets are
neither recognised or disclosed in the financial statements.
n) Dividend Distribution
Dividends paid (including income tax thereon) are recognised in the period in which the interim dividends are
approved by the Board of Directors, or in respect of the final dividend when approved by shareholders.”
o) Earnings per share
Basic and diluted earning per share is computed by dividing the profit / (loss) after tax (including the post
tax effect of extraordinary items, if any) by the weighted average number of equity shares outstanding
during the year.
p) Segment reporting
The Company identifies primary segments based on the dominant source, nature of risks and returns
and the internal organisation and management structure. The operating segments are the segments
for which separate financial information is available and for which operating profit/loss amounts are
evaluated regularly by the Executive Management in deciding how to allocate resources and in assessing
performance.
The accounting policies adopted for segment reporting are in line with the accounting policies of the
Company. Segment revenue, segment expenses, segment assets and segment liabilities have been
identified to segments on the basis of their relationship to the operating activities of the segment.
Inter-segment revenue is accounted on the basis of transactions which are primarily determined based
on market / fair value factors.
Revenue, expenses, assets and liabilities which relate to the Company as a whole and are not allocable
to segments on reasonable basis have been included under “unallocated revenue / expenses / assets /
liabilities”.
q) Cost recognition
Cost and expenses are recognised when incurred and have been classified according to their nature.
The borrowing cost represents interest payable on loans taken for carrying out business operations and
the same is charged to revenue.
Financial assets and financial liabilities are recognised when a Company becomes a party to the
contractual provisions of the instruments.
Initial Recognition
Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are
directly attributable to the acquisition or issue of financial assets and financial liabilities (other than
financial assets and financial liabilities at fair value through profit or loss and ancillary costs related to
borrowings) are added to or deducted from the fair value of the financial assets or financial liabilities, as
appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial
assets or financial liabilities at fair value through profit or loss are recognised immediately in Statement
of Profit and Loss.
Classification and Subsequent Measurement: Financial Assets
The Company classifies financial assets as subsequently measured at amortised cost, fair value through
other comprehensive income (“FVOCI”) or fair value through profit or loss (“FVTPL”) on the basis of
following:
the entity's business model for managing the financial assets and
the contractual cash flow characteristics of the financial asset.
(i) Amortised Cost
A financial asset shall be classified and measured at amortised cost if both of the following conditions
are met:
- the financial asset is held within a business model whose objective is to hold financial assets in
order to collect contractual cash flows and
- the contractual terms of the financial asset give rise on specified dates to cash flows that are
solely payments of principal and interest on the principal amount outstanding.
(ii) Fair Value through other comprehensive income
A financial asset shall be classified and measured at fair value through OCI if both of the following
conditions are met:
- the financial asset is held within a business model whose objective is achieved by both collecting
contractual cash flows and selling financial assets and
- the contractual terms of the financial asset give rise on specified dates to cash flows that are
solely payments of principal and interest on the principal amount outstanding.
(iii) Fair Value through Profit or Loss
A financial asset shall be classified and measured at fair value through profit or loss unless it is
measured at amortised cost or at fair value through OCI.
All recognised financial assets are subsequently measured in their entirety at either amortised cost
or fair value, depending on the classification of the financial assets.
Financial liabilities are classified as either financial liabilities at FVTPL or 'other financial liabilities'.
(i) Financial Liabilities at FVTPL
Financial liabilities are classified as at FVTPL when the financial liability is held for trading or are
designated upon initial recognition as FVTPL. Gains or Losses on liabilities held for trading are
recognised in the Statement of Profit and Loss.
(ii) Other Financial Liabilities:
Other financial liabilities (including borrowings and trade and other payables) are subsequently
measured at amortised cost using the effective interest method.
The effective interest method is a method of calculating the amortised cost of a financial liability and of
allocating interest expense over the relevant period. The effective interest rate is the rate that exactly
discounts estimated future cash payments (including all fees and points paid or received that form an
integral part of the effective interest rate, transaction costs and other premiums or discounts) through the
expected life of the financial liability, or (where appropriate) a shorter period, to the net carrying amount
on initial recognition.
Impairment of financial assets
Financial assets, other than those at FVTPL, are assessed for indicators of impairment at the end of
each reporting period. The Company recognises a loss allowance for expected credit losses on financial
asset. In case of trade receivables, the Company follows the simplified approach permitted by Ind AS
109 - Financial Instruments for recognition of impairment loss allowance. The application of simplified
approach does not require the Company to track changes in credit risk. The Company calculates the
expected credit losses on trade receivables using a provision matrix on the basis of its historical credit
loss experience.
Derecognition of financial assets
The Company derecognises a financial asset when the contractual rights to the cash flows from
the asset expire, or when it transfers the financial asset and substantially all the risks and rewards
of ownership of the asset to another party. If the Company neither transfers nor retains substantially
all the risks and rewards of ownership and continues to control the transferred asset, the Company
recognises its retained interest in the asset and an associated liability for amounts it may have to pay. If
the Company retains substantially all the risks and rewards of ownership of a transferred financial asset,
the Company continues to recognise the financial asset and also recognises a collateralised borrowing
for the proceeds received.
On derecognition of a financial asset in its entirety, the difference between the asset's carrying amount
and the sum of the consideration received and receivable and the cumulative gain or loss that had been
recognised in other comprehensive income and accumulated in equity is recognised in profit or loss if
such gain or loss would have otherwise been recognised in profit or loss on disposal of that financial
asset.
Derecognition of financial liabilities
A financial liability is derecognized when the obligation under the liability is discharged or cancelled or
expires. When an existing financial liability is replaced by another from the same lender on substantially
different terms, or the terms of an existing liability are substantially modified, such an exchange or
modification is treated as the derecognition of the original liability and the recognition of a new liability.
The difference in the respective carrying amounts is recognized in the statement of profit or loss.
Equity investment in subsidiaries, joint ventures and associates
Investment in subsidiaries, joint ventures and associates are carried at cost. Impairment recognized, if
any, is reduced from the carrying value.
Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if
there is a currently enforceable legal right to offset the recognised amounts and there is an intention to
settle on a net basis, to realise the assets and settle the liabilities simultaneously.
Derivative financial instruments
Derivative financial instruments are initially recognised at fair value on the date on which a derivative
contract is entered into and are subsequently re-measured at fair value. Derivatives are carried as
financial assets when the fair value is positive and as financial liabilities when the fair value is negative.
1.3 Use of estimates
The preparation of financial statements requires the management of the Company to make estimates
and assumptions that affect the reported balances of assets and liabilities and disclosures relating to
the contingent liabilities as at the date of the financial statements and reported amounts of income and
expense during the year. Future results could differ due to changes in these estimates and the difference
between the actual result and the estimates are recognised in the period in which the results are known
/ materialise.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting
estimates are recognised in the period in which the estimate is revised if the revision affects only that
period, or in the period of the revision and future periods if the revision affects both current and future
periods.
1.4 Significant estimates and judgements
The areas involving critical estimates or judgements are:
i) Estimation of useful life of Property, Plant and Equipment - Refer Note 2(e)
ii) Defined benefit obligation - Refer Note 2.25
iii) Estimation and evaluation of provisions and contingencies relating to tax litigations - Refer
Note 2.24
1.5 Recent Indian Accounting Standard (Ind AS) pronouncements which are not yet effective
Ministry of Corporate Affairs (“MCA”) notifies new standards or amendments to the existing standards
under Companies (Indian Accounting Standards) Rules as issued from time to time.
For the year ended March 31,2025, MCA has notified Ind AS - 117 Insurance Contracts and amendments
to Ind AS 116 - Leases, relating to sale and leaseback transactions, applicable to the Company w.e.f.
April 1, 2024. The Company has reviewed the new pronouncements and based on its evaluation has
determined that it does not have any impact in its financial statements.
2.26 Employee benefit plans
a Defined contribution plans
The Company makes Provident Fund and Superannuation Fund contributions to 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.13.06 Lakhs (year
ended 31 March, 2024 Rs.17.88 Lakhs) towards Provident Fund contribution and Rs.12.56 Lakhs
(Year ended 31 March, 2024 Rs.16.71 Lakhs) towards Employees State Insurance contribution in the
Statement of Profit and Loss. The contributions payable are at the rates specified in the rules of the
schemes.
- the fair value of the remaining financial instruments is determined using discounted cash flow
analysis
The fair value of unquoted equity instruments and unquoted bonds is not significantly different from their
carrying value and hence the management has considered their carrying amount as fair value.
iv. Valuation processes
The finance department of the company includes a team that performs the valuations of financial assets
and liabilities required for financial reporting purposes, including level 3 fair values. This team reports
directly to the chief financial officer (CFO) and the audit committee (AC). Discussions of valuation
processes and results are held between the CFO, AC and the valuation team at least once every three
months, in line with the company's quarterly reporting periods.
2.28 FINANCIAL RISK MANAGEMENT OBJECTIVES
The Company's activity exposes itself to variety of financial risk which includes market risk, credit risk,
liquidity risk, interest rate risk and price risk. The Company monitors and manages the above financial
risks relating to the operations of the group through internal risk reports which analyses exposures
by degree and magnitude of risks. The primary focus is to identify risks and take steps for mitigation
of risk or to minimise the potential adverse effects on the financial performance of the Company. The
Company does not enter into any derivative financial instruments to hedge risk exposures.
A) Foreign Currency Risk
The Company undertakes transactions denominated in foreign currencies and consequently
has exposure to exchange rate fluctuations. The company operates internationally and a major
portion of the international sales transaction are in USD, purchases from overseas suppliers are
in USD.
The Company evaluates exchange rate exposure arising from foreign currency transactions and
follows established risk management policies and standard operating procedures to mitigate the
risks
These exchange rate exposures are not hedged by the Company. The carrying amounts of the
Company's foreign currency denominated monetary assets and monetary liabilities at the end of
the reporting period are as follows:-
C) Market risk
Market risk is the risk of any loss in future 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 a result of changes in the interest rates, foreign currency exchange rates, equity
price fluctuations, liquidity and other market changes. Future specific market movements cannot be
normally predicted with reasonable accuracy.
D) Liquidity risk
Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of
liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use
as per requirements. The company's principal source of liquidity is from cash and cash equivalent and
working Capital borrowings. The company believes that the working capital through internal accruals
is sufficient to meet its current requirements and hence the Company does not perceive any such risk.
F) Credit risk
Credit risk arises from the risk of default on its obligation by the counterparty resulting in financial loss,
such as cash and cash equivalents and outstanding receivables.
Credit risk on cash and cash equivalents is considered negligible as the company generally invests in
fixed deposits with reputable banks. They are not impaired or past due for each of the reporting dates.
Credit risk on outstanding receivables is the exposure to billed receivable and are normally unsecured
and derived from revenue earned from customer mostly from Outside India. Credit risk is managed
by the company through credit approvals and continuously monitoring the credit worthiness of the
customer to which the company grants credit in the normal course of business. Trade receivables
consist of a large number of customers, spread across diverse industries and geographical areas. The
Company does not have any significant credit risk exposure to any single counterparty.
The concentration of credit risk is limited due to the fact that the customer base is large and unrelated.
2.29 CAPITAL MANAGEMENT
For the purpose of the company's capital management, capital includes issued equity capital, share
premium and all other equity reserves attributable to the equity holders of the Company. The primary
objective of the Company's capital management is to maximise the shareholder value.
The Company maintain or adjust the capital structure by dividend payment to shareholders, return
capital to shareholders or issue new shares. The company monitors capital using a gearing ratio,
which is net debt divided by total capital plus net debt. The Company includes within debt, interest
bearing loans and borrowings, trade and other payables, less cash and cash equivalents.
2.30 SEGMENT REPORTING
The Company has only one reportable business segment as it deals only in Manufacturing of Pipe
Fittings in terms of Ind AS 108 “Operating Segment”. All the assets of the Company are located in
India. The Company monitors the operating results as one single segment for the purpose of making
decisions about resource allocation and performance assessment. Accordingly, there are no separate
reportable segments as per IND-AS 108, “Operating Segment” prescribed under Section 133 of
the Companies Act, 2013 read with the Companies (Indian Accounting Standards) Rules, 2015, as
amended.
2.35 Trade Receivables
The Trade Receivables includes Rs.6.58 lakhs outstanding for more than two years from a party and
company has filed case before District Court, Coimbatore against those defaulted party and outcome
of case is pending and therefore no provision is made during the year.
2.36 OTHER STATUTORY INFORMATION FOR THE YEAR ENDED 31 MARCH 2025 AND 31 MARCH
2024.
(i) The Company do not have any benami property, where any proceeding has been initiated or
pending against the Company for holding any benami property under the Benami Transactions
(Prohibition) Act, 1988 (45 of 1988) and rules made thereunder.
(ii) The Company does not have any transaction with companies struck off under Section 248 of the
Companies Act, 2013 or section 560 of the Companies Act, 1956 for the year ended.
(iii) The Company does not have any charge or satisfaction which is yet to be registered with
Registrar of Companies beyond the statutory period.
(iv) The Company have not traded or invested in Crypto currency or Virtual Currency during the
financial year.
(v) The Company have 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 have 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.
(vii) The Company do not have any such transaction which is not recorded in the books of accounts
that has been surrendered or disclosed as income 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)
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