1.11) Provisions and Contingent Liabilities: (Ind AS 37):
Provisions are recognized 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. Provisions are measured at the best estimate of the expenditure
required to settle the present obligation at the Balance Sheet date.
If the effect of the time value of money is material, provisions are discounted to reflect its
present value using a current pre-tax rate that reflects the current market assessments of the
time value of money and the risks specific to the obligation. When discounting is used, the
increase in the provision due to the passage of time is recognized as a finance cost.
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 the obligation or a reliable estimate of the amount cannot be made.
1.12) Segment Reporting (Ind AS 108):
The accounting policies adopted for the segment reporting are in line with the accounting
polices stipulated. The Company primarily operates in single business segment which is Steel
Tubes (Black, GI Pipes & Stainless-Steel Pipes), and accordingly there is no primary segments to be
reported as per Indian Accounting Standard 108 “Segment Reporting”.
1.13) Revenue Recognition (Ind AS 115):
Revenue from the sale of goods is recognized when all the significant risks and rewards of
ownership in the goods are transferred to the buyer as per the terms of the contract, there
is no continuing managerial involvement with the goods and the amount of revenue can be
measured reliably. The Company retains no effective control of the goods transferred to a
degree usually associated with ownership and no significant uncertainty exists regarding the
amount of the consideration that will be derived from the sale of goods. Revenue is measured at
fair value of the consideration received or receivable, after deduction of any trade
discounts, volume rebates and any taxes or duties collected on behalf of the government
which are levied on sales such as Goods and service tax etc.
Revenue from sale of products manufactured, sale of products traded and sale or supply of
services is recognized when practically all obligations connected with the transaction risks
and rights to the buyer have been fulfilled. Revenue is measured at fair value of the
consideration received or receivable, after deduction of any trade discounts, volume rebates and
any taxes or duties collected on behalf of the government which are levied on sales such as
GST etc.
Interest income is recognized using the effective interest rate (EIR) method.
Dividend income on investments is recognized when the right to receive dividend is
established.
1.14) Leases (Ind AS 116):
Leases in which a substantial portion of the risks and rewards of ownership are retained by
the lessor are classified as operating leases. Payments and receipts under such leases are
recognised to the Statement of Profit and Loss on a straight-line basis over the term of the
lease unless the lease payments to the lessor are structured to increase in line with expected
general inflation to compensate for the lessor’s expected inflationary cost increases, in which case
the same are recognized as an expense in line with the contractual term.In accordance with
the standard, the company has recognized Right-of-Use (ROU) assests and corresponding lease
liabilities for all applicable lease arrangements, except for short-term leases of less than 12
months and leases of low-value assets which have been accounted for on a straight-line basis
over the lease term. The lease liabilities have been measured at the present value of future
lease payments, discounted using the company’s incremental borrowing rate. The ROU assets
have been measured at cost, comprising the amount of the intial lease liability, lease
payments made at or before the commencement date, and any initial direct costs, adjusted
for lease incentives received. The ROU asset is depreciated on a straight-line basis over the
lease term, while the lease liability is reduced over time using the effective interest method.
The company has also appropriately accounted for refundable security deposits by discounting
them to present value and recognizing the difference as a component of the ROU asset. The
accounting treatment and disclosures are in accordance with the principles and requirements
of Ind AS 116.
1.15) Financial Instrument: (Ind AS 109):
Financial Assets:
Financial assets are recognized when the Company becomes a party to the contractual provisions
of the instrument. On initial recognition, a financial asset is recognized at fair value, in case of
financial assets which are recognized at fair value through profit and loss (FVTPL), their
transaction costs are recognized in the statement of profit and loss. In other cases, the
transaction costs are attributed to the acquisition value of the financial asset.
Financial assets are subsequently classified as measured at
• Amortized cost
• Fair value through profit and loss (FVTPL)
• Fair value through other comprehensive income (FVOCI).
Financial assets are not reclassified subsequent to their recognition, except if and in the period
the Company changes its business model for managing financial assets.
Trade Receivables and Loans:
Trade receivables are initially recognized at fair value. Subsequently, these assets are held at
amortized cost, using the effective interest rate (EIR) method net of any expected credit
losses.The EIR is the rate that discounts estimated future cash income through the expected life
of financial instrument.
Equity Instruments:
All investments in equity instruments classified under financial assets are initially measured at fair
value; the Company may, on initial recognition, irrevocably elect to measure the same either at
FVOCI or FVTPL. The Company makes such election on an instrument-by-instrument basis. A fair
value change on an equity instrument is recognised as other income in the Statement of Profit
and Loss unless the Company has elected to measure such instrument at FVOCI. Fair value
changes excluding dividends, on an equity instrument measured at FVOCI are recognized in OCI.
Amounts recognised in OCI are not subsequently reclassified to the Statement of Profit and Loss.
Dividend income on the investments in equity instruments are recognised as ‘other income’ in
the Statement of Profit and Loss. The Company does not have any investments in equity
instruments as on balance sheet date.
Derecognition:
The Company derecognizes a financial asset when the contractual rights to the cash flows from
the financial asset expire, or it transfers the contractual rights to receive the cash flows from the
asset.
Impairment of Financial Asset:
Expected credit losses are recognized for all financial assets subsequent to initial recognition other
than financials assets in FVTPL category. For financial assets other than trade receivables, as per Ind
AS 109, the Company recognizes 12 month expected credit losses for all originated or acquired
financial assets if at the reporting date the credit risk of the financial asset has not increased
significantly since its initial recognition. The expected credit losses are measured as lifetime
expected credit losses if the credit risk on financial asset increases significantly since its initial
recognition.The Company’s trade receivables do not contain significant financing component and
loss allowance on trade receivables is measured at an amount equal to life time expected losses
i.e. expected cash shortfall. The impairment losses and reversals are recognised in Statement of
Profit and Loss.
Financial Liabilities:
Initial recognition and measurement
Financial liabilities are recognised when the Company becomes a party to the contractual
provisions of the instrument. Financial liabilities are initially measured at the amortised cost
unless at initial recognition, they are classified as fair value through profit and loss. In case of trade
payables, they are initially recognised at fair value and subsequently, these liabilities are held at
amortised cost, using the effective interest method.
Subsequent measurement
Financial liabilities are subsequently measured at amortised cost using the EIR method. Financial
liabilities carried at fair value through profit or loss is measured at fair value with all changes in fair
value recognized in the Statement of Profit and Loss.
Derecognition:
A financial liability is derecognized when the obligation specified in the contract is discharged,
cancelled or expires.
For & on Behalf of the Board
For DPV & Associate*
Chartered Accountant Bivashwa Das N. Sudharshan
FRN: 011688S Managing Director Director
DIN:07352655 DIN: 08562284
CA Vaira Mutthu K
Partner K. Suresh H Vinodh Kumar
M No: 218791 Company Secretary Chief Financial Officer
Chennai, 24th May 2025
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