l) Provisions (other than for employee benefits)
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.
Where the Company expects some or all of the expenditure
required to settle a provision will be reimbursed by
another party, the reimbursement is recognised when,
and only when, it is virtually certain that reimbursement
will be received if the entity settles the obligation. The
reimbursement is treated as a separate asset.
If the effect of the time value of money is material,
provisions are discounted using a current pre-tax rate
that reflects, when appropriate, the risks specific to the
liability. When discounting is used, the increase in the
provision due to the passage of time is recognised as a
finance cost. Expected future losses are not provided for.
m) Contingent liabilities and contingent assets
Contingent liability is a possible obligation arising from
past events and whose existence will be confirmed only
by the occurrence or non-occurrence of one or more
uncertain future events not wholly within the control of
the entity or a present obligation that arises from past
events but is not recognized because it is not probable
that an outflow of resources embodying economic
benefits will be required to settle the obligation or the
amount of the obligation cannot be measured with
sufficient reliability. The Company does not recognize
a contingent liability but discloses its existence in the
financial statements.
Contingent asset is not recognised in financial statements
since this may result in the recognition of income that
may never be realised. However, when the realisation of
income is virtually certain, then the related asset is not a
contingent asset and is recognized.
Provisions, contingent liabilities and contingent assets
are reviewed at each Balance Sheet date.
n) Commitments
Commitments include the amount of purchase order (net
of advances) issued to parties for completion of assets.
Provisions, contingent liabilities, contingent assets and
commitments are reviewed at each reporting date.
o) (i) Revenue from contract with customers
Under Ind AS 115, the Company recognized revenue
when (or as) a performance obligation was satisfied, i.e.
when 'control' of the goods underlying the particular
performance obligation were transferred to the customer.
Further, revenue from sale of goods is recognized based
on a 5-Step Methodology which is as follows:
Step 1: Identify the contract(s) with a customer
Step 2: Identify the performance obligation in contract
Step 3: Determine the transaction price
Step 4: Allocate the transaction price to the performance
obligations in the contract
Step 5: Recognise revenue when (or as) the entity satisfies
a performance obligation
Contract assets are recognized when there is excess
of revenue earned over billings on contracts. Contract
assets are classified as unbilled receivables (only act of
invoicing is pending) when there is unconditional right to
receive cash, and only passage of time is required, as per
contractual terms.
Contract liability is recognized when billings are in excess
of revenues.
Contracts are subject to modification to account for
changes in contract specification and requirements. The
Company reviews modification to contract in conjunction
with the original contract, basis which the transaction
price could be allocated to a new performance obligation,
or transaction price of an existing obligation could
undergo a change. In the event transaction price is
revised for existing obligation, a cumulative adjustment
is accounted for.
Use of significant judgements in revenue recognition
- The Company's contracts with customers could include
promises to transfer multiple products and services
to a customer. The Company assesses the products /
services promised in a contract and identifies distinct
performance obligations in the contract. Identification
of distinct performance obligation involves judgement
to determine the deliverables and the ability of
the customer to benefit independently from such
deliverables.
- Judgement is also required to determine the
transaction price for the contract. The transaction
price could be either a fixed amount of customer
consideration or variable consideration with elements
such as cash discount, trade discount, and rebate.
The transaction price is also adjusted for the effects
of the time value of money if the contract includes a
significant financing component. Any consideration
payable to the customer is adjusted to the transaction
price, unless it is a payment for a distinct product or
service from the customer. The estimated amount of
variable consideration is adjusted in the transaction
price only to the extent that it is highly probable that
a significant reversal in the amount of cumulative
revenue recognised will not occur and is reassessed
at the end of each reporting period. The Company
allocates the elements of variable considerations to
all the performance obligations of the contract unless
there is observable evidence that they pertain to one or
more distinct performance obligations.
- The Company uses judgement to determine an
appropriate selling price for a performance obligation.
The Company allocates the transaction price to each
performance obligation on the basis of the relative
selling price of each distinct product or service
promised in the contract.
Revenue Recognition
The Company recognises revenue generally at the point
in time when the products are delivered or dispatched
to customer or when it is delivered to a carrier for export
sale, which is when the control over product is transferred
to the customer.
Revenue towards satisfaction of a performance obligation
is measured at the amount of transaction price (net of
variable consideration) allocated to that performance
obligation. A receivable is recognised when the goods are
delivered as this is the point in time that the consideration
is unconditional because only passage of time is required
before payment is due.
(ii) Export Incentives
Export incentives under various schemes notified by the
government are recognised on accrual basis when no
significant uncertainties as to the amount of consideration
that would be derived and as to its ultimate collection
exist.
(iii) Insurance and Other Claims
Revenue in respect of claims is recognized when no
significant uncertainty exists with regard to the amount
to be realized and the ultimate collection thereof.
p) Government grants
Government grants in the form of transfers of resources
to the Company in return for past compliance with certain
conditions relating to the operating activities of the
Company are recognized as other income in profit or loss.
Government grants related to capital assets are
recognized initially as deferred income at fair value or
deducted from the carrying value of the asset when there
is reasonable assurance that they will be received and
the Company will comply with the conditions associated
with the grant; they are then recognised in profit or loss
as other income on a systematic basis or depreciated over
the remaining useful life of the asset, respectively.
Further, Grants that compensate the Company for
expenses incurred are recognised in profit or loss on a
systematic basis in the periods in which such expenses
are recognised.
q) Recognition of interest income or expense
Interest income or expense is recognised using the
effective interest method.
The 'effective interest rate' is the rate that exactly
discounts the estimated future cash payments or receipts
through the expected life of the financial instrument to:
a) the gross carrying amount of the financial asset; or
b) the amortised cost of the financial liability.
In calculating interest income and expense, the effective
interest rate is applied to the gross carrying amount of
the asset (when the asset is not credit-impaired) or to
the amortised cost of the liability. However, for financial
assets that have become credit impaired subsequent
to initial recognition, interest income is calculated by
applying the effective interest rate to the amortised
cost of the financial asset. If the asset is no longer credit-
impaired, then the calculation of interest income reverts
to the gross basis.
r) Income taxes
Income tax comprises current and deferred tax. It is
recognised in Statement of Profit and Loss except to the
extent that it relates to a business combination or an item
recognised directly in equity or in other comprehensive
income.
The Company has determined that interest and
penalties related to income taxes, including uncertain
tax treatments, do not meet the definition of income
taxes, and therefore accounted for them under Ind AS 37
Provisions, Contingent Liabilities and Contingent Assets.
Current tax
Current tax comprises the expected tax payable or
receivable on the taxable income or loss for the year and
any adjustment to the tax payable or receivable in respect
of previous years. The amount of current tax reflects the
best estimate of the tax amount expected to be paid or
received after considering the uncertainty, if any, related
to income taxes. It is measured using tax rates (and tax
laws) enacted or substantively enacted by the reporting
date.
Current tax assets and current tax liabilities are offset
only if there is a legally enforceable right to set off the
recognised amounts, and it is intended to realise the asset
and settle the liability on a net basis or simultaneously.
Deferred tax
Deferred tax is recognised in respect of temporary
differences between the carrying amounts of the assets
and liabilities for financial reporting purposes and the
corresponding amounts used for taxation purposes.
Deferred tax is also recognised in respect of carried
forward tax losses (if any) and tax credits.
Deferred tax assets are recognised to the extent that it
is probable that future profits will be available against
which they can be used. Deferred tax assets are reviewed
at each reporting date and are recognised to the extent
that it is probable that the related tax benefits will be
realized. Deferred tax is measured at the tax rates that are
expected to apply to the period when the asset is realized
or the liability is settled, based on the laws that have
been enacted or substantively enacted by the reporting
date. Deferred tax assets - unrecognised or recognised,
are reviewed at each reporting date and are recognised
/ reduced to the extent that it is probable / no longer
probable respectively that the related tax benefits will be
realized.
The measurement of deferred tax reflects the tax
consequences that would follow from the manner in
which the Company expects, at the reporting date, to
recover or settle the carrying amount of its assets and
liabilities.
Section 115 BAA of the Income Tax Act 1961, introduced
by Taxation Laws (Amendment) Ordinance, 2019 gives a
one-time irreversible option to Domestic Companies for
payment of corporate tax at reduced rates. The Company
has opted the new tax regime from 1 April 2022.
Deferred tax assets and liabilities are offset only if there
is a legally enforceable right to set off the current tax
liabilities and assets, and they relate to income taxes
levied by the same tax authorities.
s) Operating segments
An operating segment is a component of the Company
that engages in business activities from which it may
earn revenues and incur expenses, including revenues
and expenses that relate to transactions with any
of the Company's other components, and for which
discrete financial information is available. All operating
segments' operating results are reviewed regularly by
the Company's Chief Operating Decision Maker (CODM)
to make decisions about resources to be allocated to the
segments and assess their performance.
t) Corporate Social Responsibility (CSR) expenditure
CSR expenditure incurred by the Company is charged to
the Statement of the Profit and Loss.
u) Cash and cash equivalents
For the purpose of presentation in the statement of cash
flows, cash and cash equivalents include cash in hand,
demand deposits held with banks, 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.
v) Cash flow statement
Cash flows are reported using the indirect method,
whereby profit for the period 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.
w) Earnings per share
Basic earnings/ (loss) per share is calculated by dividing
the net profit/(loss) for the year attributable to equity
shareholders by the weighted average number of equity
shares outstanding during the year. The weighted average
number of equity shares outstanding during the period is
adjusted for events of bonus issue and share split. For the
purpose of calculating diluted earnings/ (loss) per share,
the net profit or loss for the period attributable to equity
shareholders and the weighted average number of shares
outstanding during the year are adjusted for the effects of
all dilutive potential equity shares.
x) Share capital
Equity shares
Incremental costs directly attributable to the issue of
equity shares are recognized as a deduction from equity.
Income tax relating to transaction costs of an equity
transaction is accounted for in accordance with Ind AS 12.
y) Recent accounting pronouncement
Ministry of Corporate Affairs (MCA) notifies new standard
or amendments to the existing standards under
Companies (Indian Accounting Standards) Rules as issued
from time to time. On 13 August 2025, MCA amended the
Companies (Indian Accounting Standards) Rules, 2015
by issuing the Companies (Indian Accounting Standards)
Second Amendment Rules, 2025, applicable from l April
2026, as below:
Ind AS 1 - Presentation of Financial Statements - If a
covenant breach occurs on or before the reporting date
and the liability becomes payable on demand, it must
be classified as current, even if the lender subsequently
agrees not to demand repayment. It is classified as
current because, at the reporting date, the entity does
not have the right to defer settlement for at least 12
months. However, if the lender has already provided-
by the reporting date-a grace period extending at least
12 months beyond that date, during which the breach
can be rectified and repayment cannot be demanded,
the liability is classified as non-current. The Company
has evaluated the amendment and does not expect this
amendment to have any significant impact in its financial
statements.
This amendment is to be applied retrospectively for
annual reporting periods beginning on or after 1 April
2026, in accordance with Ind AS 8, Accounting Policies,
Changes in Accounting Estimates and Errors.
17.3 Rights, preferences and restrictions attached to shares
i) The Company has only one class of equity shares having par value of H10 per share. Accordingly all equity shares rank
equally with regard to dividends and share in the company's residual assets on winding up. Each shareholder of equity
share is entitled to one vote per share. The Company declares and pays dividends in Indian Rupees. The dividend
proposed by the Board of Directors is subject to approval of the shareholders (except for interim dividend) in the
ensuing Annual General Meeting. In the event of liquidation of the company, the equity shareholders will be entitled to
receive the remaining balance of assets if any, after preferential payments and to have a share in surplus assets of the
Company, proportionate to their Individual shareholding in the paid up equity capital of the Company.
ii) Pursuant to Share Subscription and Investment Agreement entered on 29 May 2025 with Aichi Steel Corporation (ASC)
a Japanese Corporation incorporated under the laws of Japan having its registered office at 1, Wanowari, Aro-machi,
Tokai-shi, Aichi-ken, 476-8666, Japan and the Company, ASC as minority protection, has rights in the Company such as
right to nominate on the Board, affirmative vote rights, participatory rights, etc.
17.4 Bonus shares, shares buyback and issue of shares for consideration other than in cash during five years immediately
preceding 31 March 2026.
During the five years immediately preceding 31 March 2026 ('the period'), the company had neither bought back any shares
nor it had issued any shares for consideration other than cash except as stated below.
i) During the year ended 31 March 2024, pursuant to approval given by its shareholders, the Company had issued
4,06,27,414 bonus equity shares of H10 each as fully paid up in the ratio of one equity share for every one existing equity
share and Capitalization of such sum out of Securities Premium Account of Company.
ii) Further, the Company has issued 91,125 for year ended 31 March 2026 (Previous year: 1,36,750) bonus equity shares
with employee stock option plan in the ratio of 1:1.
18 Other equity
(also refer to Statement of Changes in Equity)
(a) Securities premium
Securities premium represents the excess consideration received by the Company over the face value of the shares
issued to shareholders. This will be utilised in accordance with the applicable provisions of the Companies Act, 2013.
(b) General reserve
The General reserve is used from time to time to transfer profits from retained earnings for appropriation purposes.
As the General reserve is created by a transfer from one component of equity to another and is not an item of other
comprehensive income, items included in the General reserve will not be reclassified subsequently to the Statement of
Profit and Loss.
(c) Share Options Outstanding Account
The fair value of the equity settled share based payment transactions with employees is recognised in Statement of
Profit and Loss with corresponding credit to share based payment reserve.
(Refer note 42.4)
(d) Retained earnings
Retained earnings are the profits that the Company has earned till date, less any transfers to general reserve, dividends
or other distributions paid to shareholders.
19.1 Notes
(a) Security details:
Term loans of HNil (Previous year: H1,412.74) are secured by a first parri passu charge on entire movable & immoveable
property, plant and equipments of the Company (both present & future) including land and Building situated at C-58 & part
of land out of plot no. C-59, Focal Point, Ludhiana & Pioneer Industrial Park, Pathrerdi, Gurugram and second parri passu
charge on entire current assets of the Company.
(b) Terms & repayment schedule:
- Term loan of HNil (Previous year: H423.18) from ICICI Bank Limited. (31 March 2025: 1 instalment)
- Term loan of HNil (Previous year: H990.00) from HDFC Bank Limited. (31 March 2025: 6 instalments)
- During the current year, the nominal (floating) interest rate was in the range of 6.70% to 8.50% (31 March 2025: in the
range of 7.79% to 9.48% per annum)
19.2 Cash credit/overdraft and working capital demand loan facilities from Consortium banks aggregating to H9,264.95 (Previous
year: H8,072.39) against a sanctioned fund based and non-fund based working capital facility of H30,000 (Previous year:
H30,000) and H20,000 (Previous year: H20,000) respectively. These limits are secured by hypothecation of entire present and
future tangible current assets of the Company as well as a second charge on the entire present and future property, plant and
equipments of the Company.
19.3 During the current year, the interest rate on working capital demand loan facilities was in the range of 5.89% to 8.11% (31
March 2025: in the range of 6.67% to 7.95% per annum)
19.4 Unsecured working capital loan & corporate credit card facilities:
- From CTBC Bank corporation limited aggregating to H Nil (Previous year: H1,200.00) against a sanctioned limit of H5,000
(Previous year: H5,000).
- From Axis Bank Limited aggregating to H Nil (Previous year: H950.69) against a sanctioned limit of H3,000 (Previous year: H3,000).
- From ICICI Bank Limited aggregating to H Nil (Previous year: H337.02) against a sanctioned limit of H500 (Previous year: H500).
19.6 The Company has borrowings from banks and financial institutions on the basis of security of current assets. The quarterly
returns or statements of current assets filed by the Company with banks and financial institutions are in agreement with the
books of accounts in the current year and for previous year
19.7 In the year ended 31 March 2026 and 31 March 2025, the actual utilisation of working capital remained within the bank
sanction/DP limits.
19.8 There are no charges or satisfaction of charges which required registration for year ended 31 March 2026 and for 31 March
2025 and are pending as of the respective dates.
20 Lease liabilities
The Company has entered into agreement for taking office premises on lease and license basis. The one lease is running for
a period of up to 10 years with no restriction placed upon the Company for entering into said lease.
The Company also leases certain office premises/Guest house with contract terms up to one year. These leases are short¬
term in nature and the Company has elected not to recognise right-of-use assets and lease liabilities for these leases. Rental
expense recorded for short-term leases was H135.11 (Previous year: H122.98) (Refer note 36).
Supplier finance arrangements
The Company participates in a supplier finance arrangement under which its suppliers may elect to receive early payment of
their invoices from TREDs Platform. Under the arrangement, A-TREDs platform agrees to pay amounts due to participating
suppliers in respect of invoices owed by the Company and the Company repays A-TREDs platform at a later date. The principal
purpose of this arrangement is to facilitate efficient payment processing and provide the willing suppliers early payment
terms, compared with the related invoice payment due date.
The Company derecognises the original trade payables upon entering into the arrangement, as the obligation to the suppliers
is settled through payment by the A-TREDs platform and a new liability is recognised in favour of A-TREDs. However, such
arrangement does not alter the rights and obligations of the Company.
The company does not have any unbilled revenue or contract assets as at 31 March 2026 and 31 March 2025. The contract
liabilities relate to the advance received from customers against which revenue will be recognized when the performance
obligation is satisfied.
Invoices are usually payable within 45-90 days.
The amount of H663.14 included in contract liabilities at 31 March 2025 has been recognised as revenue during the year
ended 31 March 2026. (31 March 2025: H47.23)
Revenue from contracts with customers is recognized when the control of the goods or services is transferred to the customers
on satisfaction of distinct performance obligations at the amount of transaction price (net of discounts, rebates etc.).
Information about major customers:
Revenue from sale of products to one customer which individually constitutes more than 10 percent of the Company's total
revenue is H19,068.37 (previous year one customer total revenue H19,774.03).
#No information is provided about remaining performance obligations as at 31 March 2026 or 31 March 2025 that are part of contracts that
have an original expected duration of 1 year or less as allowed Ind AS 115.
39.3 Pursuant to judgement by the Hon'ble Supreme Court dated 28 February 2019, it was held that basic wages, for the purpose
of provident fund, to include special allowances which are common for all employees. However, there is uncertainty with
respect to the applicability of the judgement and period from which the same applies. Owing to the aforesaid uncertainty
and pending clarification from the authorities in this regard, the Company had not recognised any provision for the years
prior to 28 February 2019. Further, management also believes that the impact of the same on the Company though not
quantifiable will not be material.
40 Segment information
Board of Directors of the Company has been identified as the Chief Operating Decision Maker (CODM) as defined by Ind AS
108, Operating Segments. Operating Segments have been defined and presented based on the regular review by the CODM
to assess the performance of segment and to make decision about allocation of resources. The Company has identified only
one operating segment i.e.Manufacturing of Steel products and operations are mainly within India. Hence, it is the only
reportable segment under Ind AS 108 'Operating Segments'. Entity wide disclosure required by Ind AS 108 are made as
follows:
42.2 Defined contribution plan:-
41 The Micro, Small and Medium Enterprises Development (MSMED) Act, 2006
The Ministry of Micro, Small and Medium Enterprises has issued an Office Memorandum dated 26 August 2008 which
recommends that the Micro and Small Enterprises should mention in their correspondences with its customers the
Entrepreneurs Memorandum Number as allocated after filing of the Memorandum. Accordingly, the disclosure in respect
of amounts payable to such enterprises as at the year end has been made in the financial statements based on information
available with the Company as under :
The Company's provident fund scheme, employee's state insurance (ESI) and others funds are defined contribution plans.
The Company has recorded an expense of H493.61 (Previous year: H443.27) under provident fund scheme, H43.78 (Previous
Year: H51.25) Unser ESI Scheme, H40.08 (Previous Year: H28.61) under national pension scheme and H3.30 (Previous Year:
H3.08)under labour welfare fund. These have been included in the note 33 Employees benefits expenses, in Statement of
Profit and Loss.
42.3 Defined benefit plan
Gratuity (funded)
The employees' gratuity fund scheme managed by VSSL Gratuity fund trust is a defined benefit plan. The present value of
obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognises each period
of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the
final obligation. The Company makes annual contributions to the VSSL Gratuity fund trust.
The above defined benefit plan exposes the Company to following risks:
Interest rate risk:
The defined benefit obligation calculated uses a discount rate based on government bonds. If bond yields fall, the defined
benefit obligation will tend to increase.
Salary inflation risk:
Higher than expected increase in salary will increase the defined benefit obligation
Demographic risk:
This is the risk of variability of results due to unsystematic nature of decrements that include mortality, withdrawal, disability
and retirement. The effect of these decrements on the defined benefit obligation is not straight forward and depends upon
the combination of salary increase, discount rate and vesting criteria. It is important not to overstate withdrawals because
in the financial analysis the retirement benefit of a short career employee typically costs less per year as compared to a long
service employee.
The Company actively monitors how the duration and the expected yield of the investments are matching the expected cash
outflows arising from the employee benefit obligations. The Company has not changed the processes used to manage its
risks from previous periods. The funds are managed by specialised team of VSSL Gratuity Fund Trust
i) Funding
Gratuity is a funded benefit plan for qualifying employees. 100% of the plan assets are managed by VSSL Gratuity fund
trust. The assets managed are highly liquid in nature and the Company does not expect any significant liquidity risks.
The following table sets out the status of the defined benefit plan as required under Ind-AS 19 - Employee Benefits:
During the year ended 31 March 2026, the Central Government of India has notified the Code on Wages, 2019, the
Industrial Relations Code, 2020, the Code on Social Security, 2020 and the Occupational Safety, Health and Working
Conditions Code, 2020, collectively referred to as the 'New Labour Codes', effective from 21 November 2025 primarily
impacting the wage definition to be considered for the purpose of defined benefit obligation relating to gratuity. As a
result of this plan amendment, the company's defined benefit obligation increased by H102.99 (31 March 2025: nil) and
H21.86 (31 March 2025: nil) on provision for compensated absences. A corresponding past service cost was recognised
in profit or loss during the current year.
42.4 Share based payments to employees (Equity Settled)
i) ESOP Plan 2016: Second (2nd) Grant
The Nomination and Remuneration Committee of the Company in its meeting held on 11 November 2020 has granted
135,000 options to its eligible employees against the plan under the Second grant out of 136,937 options lying un¬
granted at a price of H72 per share, other terms and conditions remaining the same.
During the year, the Company has allotted 23,375 (Previous year: 32,000) equity shares to the eligible employees at a
price of H72 per share. Along with this employees had also exercised 23,375 Bonus Shares in the ratio of 1:1 during the
year (Previous year: 32,000)
The fair value at grant date is determined using the Black Scholes Model which takes into account the exercise price,
the term of the option, the share price at grant date and expected price volatility of the underlying share, the expected
dividend yield and the risk free interest rate for the term of the option.
ii) ESOP Plan 2016: Third (3 rd) Grant
The Nomination and Remuneration Committee in its meeting held on 23rd July, 2022 has made a third grant of 9,000
options under ESOP Plan 2016 to its eligible employees out of 9,437 options lying ungranted under the said Plan at a
price of H72 per share.
During the year, the Company has allotted 2,250 (Previous year: 2,250) equity shares to the eligible employees at a price
of H72 per share. Along with this employees had also exercised 2,250 Bonus Shares in the ratio of 1:1 during the year
(Previous year: 2,250)
The fair value at grant date is determined using the Black Scholes Model which takes into account the exercise price,
the term of the option, the share price at grant date and expected price volatility of the underlying share, the expected
dividend yield and the risk free interest rate for the term of the option.
The Company has established an Employee Stock Option Plan ('ESOP') in accordance with the Securities and Exchange
Board of India (Share Based Employee Benefits) Regulations, 2014) which has been approved by the Board of Directors
in its meeting held on 6 August 2020 and by the shareholders in their meeting held on 25 September, 2020. The Board
had delegated necessary power to the Nomination and Remuneration Committee to Implement and administer the
plan. Accordingly, the Nomination and Remuneration Committee of the Company in its meeting held on 11 November
2020 has granted 3,63,000 options to its eligible employees against the plan under the first grant out of total of 5,00,000
options.
During the year, the Company has allotted 40,250 (Previous year : 77,250) equity shares to the eligible employees at a
price of H72 per share. Along with this employees had also exercised 40,250 Bonus Shares in the ratio of 1:1 during the
year (Previous year: 77,250)
The fair value at grant date is determined using the Black Scholes Model which takes into account the exercise price,
the term of the option, the share price at grant date and expected price volatility of the underlying share, the expected
dividend yield and the risk free interest rate for the term of the option.
iv) ESOP Plan 2020: Second (2nd) Grant
The Nomination and Remuneration Committee in its meeting held on 23rd July, 2022 has made a second grant of
1,25,000 options under ESOP Plan 2020 to its eligible employees out of 2,20,500 options lying ungranted under the said
Plan at a price of H72 per share.
During the year, the Company has allotted 25,250 (Previous year : 25,250) equity shares to the eligible employees at a
price of H72 per share. Along with this employees had also exercised 25,250 Bonus Shares in the ratio of 1:1 during the
year (Previous year: 25,250)
The fair value at grant date is determined using the Black Scholes Model which takes into account the exercise price,
the term of the option, the share price at grant date and expected price volatility of the underlying share, the expected
dividend yield and the risk free interest rate for the term of the option.
The Nomination and Remuneration Committee in its meeting held on 18th July, 2024 has made a Third grant of 1,36,500
options under ESOP Plan 2020 to its eligible employees out of 1,37,125 options lying ungranted under the said Plan at
a price of H145 per share. These options will vest with the eligible employees after two years from the date of grant.
During the year no allotment has been made by the company to the eligible employees under 3rd Grant of ESOP Plan
2020, as vesting period is 2 years.
The fair value at grant date is determined using the Black Scholes Model which takes into account the exercise price,
the term of the option, the share price at grant date and expected price volatility of the underlying share, the expected
dividend yield and the risk free interest rate for the term of the option.
*Nature of CSR activities
43.5 Terms and conditions of transactions with related parties
The transactions with related parties are made on terms equivalent to those that prevail in arm's length transactions. This
assessment is undertaken each financial year through examining the financial position of the related party and the market in
which the related party operates. Outstanding balances at the year end are unsecured.
Current Year - On Environment Sustainability H151.26, On Women Empowerment - H43.31, On Preventive Health care H53.35,
On Promoting Education H48.29, On Promoting Sports H19.00, on Other sectors H24.65 and on CSR admin expense - H12.17
(This includes expenditure of H75.61 w.r.t. previous year shortfall). No amount has been spent on construction/acquisition of
any asset.
(Previous year - On Environment Sustainability H89.38, On Women Empowerment - H54.23, On Preventive Health care
H44.46, On Promoting Education H30.86, On Promoting Sports H12.50 and on Other sectors H32.33. (This includes expenditure
of H33.30 w.r.t. previous year shortfall) No amount has been spent on construction/acquisition of any asset.
**Reason for shortfall
Amount remaining unspent pertains to Ongoing/Multilayer Projects approved by CSR committee which will be spent in the
coming years.
Details of Deposit in Unspent CSR Account
In accordance with the provisions of Section 135 of the Companies Act, 2013, since the Company has fully spent the entire
CSR obligation during the financial year, there is no unspent CSR amount required to be transferred to a special CSR account,
and accordingly, the requirement to open a separate CSR bank account does not arise.
(Previous year: H46.25 had been deposited in the special account named Vardhman Special Steels Limited -Unspent CSR
Account FY 2024-25 on 18 April 2025 related to shortfall as on 31 March 2025, out of which H46.25 has been spent in current
year and balance stands HNil as on 31 March 2026.)
(For the year 2023-24: H70.60 had been deposited in the special account named Vardhman Special Steels Limited -Unspent
CSR Account FY 2023-24 on 12 April 2024 related to shortfall as on 31 March 2024, out of which H33.30 had been spent in the
financial year 2024-25 & H29.37 has been spent during the current year (2025-26) and balance H7.93 stands unspent as on 31
March 2026)
Notes:
(i) Fair value of financial assets and liabilities with short term maturities is considered as approximate to respective carrying
amount due to the short term maturities of these instruments. Further, in accordance with amendment Ministry of Corporate
Affairs notified in Ind AS 113 on 30 March 2019, fair value measurement of lease liabilities is not required.
(ii) Fair value of non-current financial assets has not been disclosed as there is no significant differences between carrying value
and fair value.
(iv) Derivatives are carried at fair value at each reporting date. The fair values of the derivative financial instruments has been
determined using valuation techniques with market observable inputs. The company uses mark to market provided by
bank for valuation of this derivative contracts. There are no significant unobservable inputs used for Derivative financial
instruments. This is classified as at level II
There are no transfers between Level 1, Level 2 and Level 3 during the year ended 31 March 2026 and 31 March 2025.
46 Financial risk management
46.1 Risk management framework
The Company's board of directors has overall responsibility for the establishment and oversight of the Company's risk
management framework. The board of directors has established the risk management committee which is responsible for
developing the monitoring the company risk management policies. The Company's risk management policies are established
to identify and analyse the risk faced by the Company, to set appropriate risk limits and controls and to monitor risks and
adherence to limits. Risk management policies and systems are reviewed regularly to effect changes in market conditions
and Company's activities. The Company, through its training and management standards and procedures, aims to maintain
discipline and constructive control environment in which all employees understand their roles and obligations.
The Company's audit committee oversees how management monitors compliance with Company's risk management policies
and procedures, and reviews the adequacy of the risk management framework in relation to risk faced by the Company. The
audit committee is assisted in its oversight role by internal audit. Internal audit undertakes both regular and adhoc reviews
of risk management controls and procedures, the result of which are reported to audit committee.
The Company has exposure to the following risks arising from financial instruments:
- credit risk (see (ii))
- liquidity risk (see (iii)): and
- market risk (see (iv))
Credit risk is the risk of financial loss to the Company if a customer or counter party to a financial instrument fails to meet
its contractual obligations. The carrying amount of financial assets represents the maximum credit risk exposure and arises
principally from the Company's receivable from customers and loans. The maximum exposure to credit risks is represented
by the total carrying amount of these financial assets in the Balance Sheet:
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, credit agency information, industry information and business intelligence. Sale limits are
established for each customer and reviewed annually. Any sales exceeding those limits require approval from the appropriate
authority as per policy. In monitoring customer credit risk, customers are grouped according to their credit characteristics,
including whether they are an individual or a legal entity, whether they are institutional, dealers or end-user customer, their
geographic location, industry, trade history with the Company and existence of previous financial difficulties.
The Company based on internal assessment which is driven by the historical experience/ current facts available in relation
to default and delays in collection thereof, the credit risk for trade receivables is considered low. The Company estimates its
allowance for trade receivable using lifetime expected credit loss. Individual receivables which are known to be uncollectible
are written off by reducing the carrying amount of trade receivable and the amount of the loss is recognised in the Statement
of Profit and Loss within other expenses.
The loans primarily represents loans given to employees. The management believes these to be high quality assets with
negligible credit risk. The management believes the parties to which these loans have been given have strong capacity to
meet the obligations and where the risk of default is negligible or nil and accordingly no allowance for expected credit loss
has been provided on these financial assets.
Credit risk on cash and cash equivalents and bank deposits is limited as the Company generally invests in deposits with banks
with high credit ratings assigned by domestic credit rating agencies.
Other financial assets mainly includes Govt. Grant i.e. incentives under Industrial and Business Development Policy 2017 of
the State Government for its expansion cum upgradation project of Steel Melt Shop completed in FY 2019-20. Pursuant to
the necessary approvals from the competent authorities resulting in satisfaction of recognition conditions for government
grants in accordance with Ind AS 20, the Company has recorded these as financial assets.
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial
liabilities that are settled by delivering cash or another financial assets. The Company's approach to manage liquidity is to
have sufficient liquidity to meet it's liabilities when they are due, under both normal and stressed circumstances, without
incurring losses or risking damage to the Company's reputation.
Management manages the liquidity risk by monitoring cash flow forecasts on a periodic basis and maturity profiles of
financial assets and liabilities. This monitoring takes into account the accessibility of cash and cash equivalents and additional
undrawn financing facilities.
The Company is exposed to interest rate risk because funds are borrowed at both fixed and floating interest rates. Interest
rate risk is measured by using the cash flow sensitivity for changes in variable interest rate. The risk is managed by the
Company by maintaining an appropriate mix between fixed and floating rate borrowings. The exposure of the Company's
borrowing to interest rate changes as reported to the management at the end of the reporting period are as follows:
46.4 Market risk
(a) Commodity price risk
The Company is exposed to the movement in price of key raw materials in domestic and international markets. The Company
has in place policies to manage exposure to fluctuations in the prices of the key raw materials used in operations. The
Company manages fluctuations in raw material price through hedging in the form of advance procurement when the prices
are perceived to be low and also enters into advance buying contracts as strategic sourcing initiative in order to keep raw
material and prices under check to the extent possible.
(b) Interest rate risk
Interest rate risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in market
interest rates. The Company's exposure to the risk of changes in market interest rates relates primarily to the Company's
borrowings with floating interest rates.
(c) Foreign Currency Risk and sensitivity
The functional currency of the Company is Indian Rupee (H). The Company is exposed to foreign exchange risk through
its sales in international markets and purchases from overseas suppliers in various foreign currencies. The Company has
foreign currency trade payables and receivables and is therefore, exposed to foreign exchange risk. The Company holds
derivative financial instruments such as foreign exchange contracts to mitigate the risk of changes in exchange rates on
foreign currency exposures. The exchange rate between the rupee and foreign currencies has changed substantially in recent
years and may fluctuate substantially in the future. Consequently, the results of the Company's operations are affected as the
rupee appreciates/ depreciates against these currencies.
47 Capital Management
47.1 Risk 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 shareholders . The primary objective of the Company's capital management is to
maximise the shareholder value.
The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the
requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the 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 net debt, interest bearing loans
and borrowings, trade and other payables, less cash and cash equivalents, excluding discontinued operations. The Company
policy is to keep the gearing ratio at less than 100%.
49 Additional regulatory information pursuant to the requirement in Division II of Schedule III to the Companies Act 2013:
(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 does not have any transactions with companies struck off.
(iii) The Company has not revalued its property, plant and equipment (including right-of-use assets) or intangible assets or
both during the current or previous year.
(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 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 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 been declared wilful defaulter by any bank or financial institution or government or any
government authority.
(ix) The Company has complied with the number of layers prescribed under the Companies Act, 2013.
(x) The Company has not entered into any scheme of arrangement which has an accounting impact on current or previous
financial year.
(xi) The Company including the "Companies in the Group" (as per the provisions of the Core Investment Companies (Reserve
Bank) Directions, 2016) do not have any Core Investment Company ("CIC")
50 The Company has established a comprehensive system of maintenance of information and documents as required by the
transfer pricing regulation under sections 92-92F of the Income-Tax Act, 1961. Since the law requires existence of such
information and documentation to be contemporaneous in nature, the Company continuously updates its documentation
for the international transactions entered into with the associated enterprises during the financial year and expects such
records to be in existence latest by the due date as required under law. The management is of the opinion that its international
transactions are at arm's length so that the aforesaid legislation will not have any impact on the financial statements,
particularly on the amount of income tax expense and that of provision for taxation.
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