(x) Provisions:
Provisions are recognised when the Company has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and the amount can be reliably estimated. Provisions are not recognised for future operating losses.
Provisions are measured at the present value of management's best estimate of the expenditure required to settle the present obligation at the end of the reporting period.
In case of onerous contracts, the company recognizes the impairment losses if any, occurred on assets used in fulfilling the contract.
(y) Contingent liabilities:
A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Company or a present obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare
cases where there is a liability that cannot be recognized because it cannot be measured reliably. The Company does not recognize a contingent liability but discloses its existence in the financial statements.
Contingent liabilities, contingent assets and commitments are reviewed at each Balance Sheet date.
(z) Earnings per share:
Basic earnings per share is computed by dividing the profit / (loss) after tax by the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed by dividing the profit / (loss) after tax as adjusted for dividend, interest and other charges to expense or income relating to the dilutive potential equity shares, by the weighted average number of equity shares considered for deriving basic earnings per share and the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares. Potential equity shares are deemed to be dilutive only if their conversion to equity shares would decrease the net profit per share from continuing ordinary operations. Potential dilutive equity shares are deemed to be converted as at the beginning of the period, unless they have been adjusted prospectively, if appropriate.
(za) Borrowings:
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised cost. Any difference between the proceeds (net of
transaction costs) and the redemption amount is recognised in Statement of Profit and Loss over the period of the borrowings. Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a prepayment for liquidity services and amortised over the period of the facility to which it relates.
Borrowings are removed from the Balance Sheet when the obligation specified in the contract is discharged, cancelled or expired. The difference between the carrying amount of a financial liability that has been extinguished or transferred to another party and the consideration paid, including any non- cash assets transferred or liabilities assumed, is recognised in Statement of Profit and Loss as other gains/(losses).
Borrowings are classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability for at least 12 months after the reporting period. Where there is a breach of a material provision of a long-term loan arrangement on or before the end of the reporting period with the effect that the liability becomes payable on demand on the reporting date, the company does not classify the liability as current, if the lender agreed, after the reporting period and before the approval of the financial statements for issue, not to demand payment as a consequence of the breach.
11.1 Term and conditions of compound financial instruments - Preference Shares 0 % Series A Redeemable Non Cumulative Preference Shares
33,16,200 .0% Series A Redeemable Non Cumulative Preference Shares of Rs. 10 each.
Terms and conditions
i) The 0% Series A Redeemable Preference Shares of Rs. 10/- be redeemed at par, without any premium, and shall be redeemed by the Company at any time within 20 years from the date of issue.
ii) The 0% Series A Redeemable Preference Shares of Rs. 10/- shareholders are vested with right of put option for redemption of share at any time, before the company calls for redemption.
iii) These preference shareholders have voting rights only in respect of certain matters as per the provisions of Section 47(2) of the Act.
iv) The RNCPS are non-participating shares in the surplus funds.
v) The RNCPS carry a preferential right vis-a-vis Equity Shares of the Company with respect to repayment in case of winding up or repayment of capital.
11.2 Money received against Share Warrants (Refer Note Number 10.5 & 10.6).
11.3 Nature and purpose of creation and utilisation of reserves.
11.3.1 Securities Premium: Securities premium is created on excess amount received over and above the face value on issue of the shares and securities. The securities premium can be utilised in accordance with the provisions of Section 52 of the Companies Act 2013. These include issue of bonus shares and writing of expenses incurred such as commission etc. on issue of shares/securities.
11.3.2 Capital Redemption Reserve(CRR) : The Companies Act, 2013 requires that when a Company purchases its own shares out of free reserves or securities premium account, a sum equal to the nominal value of the shares so purchased shall be transferred to a capital redemption reserve. The reserve is utilised in accordance with the provisions of Section 69 of the Companies Act, 2013.
11.3.3 Retained Earnings: Retained earnings are the profits (including Other Comprehensive income) that the company has earned till date, less any transfer to general reserve, dividends or other distribution or the distributions paid to the shareholders.
30 Disclosure pursuant to Ind AS 19 "Employee Benefits"
(a) Defined contribution plans:
The Company makes Provident Fund contributions which are 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.125.71 Lakhs (Year ended March 31, 2023 Rs.28.79 Lakhs) for Provident Fund contributions in the statement of profit and loss. The contributions payable to these plans by the company are at rates specified in the rules of the schemes. The obligation of the company is limited to the amount contributed and it has no further contractual nor any constructive obligation.
(b) Defined benefit plans:
Employee benefit Obligation :
The Company has an obligation towards gratuity, a defined benefit retirement plan covering eligible employees. The plan provides for a lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 to 30 days salary payable for each completed year of service. Vesting occurs upon completion of five years of service. The Company makes annual contributions to gratuity funds established as trusts or insurance companies. The Company accounts for the liability for gratuity benefits payable in the future based on a year end actuarial valuation.
Movement of defined benefit obligation: The amounts recognised in the balance sheet and the movements in the net defined benefit obligation over the year are as follows:
32.3 * ITAT has decided the appeal in company's favour by allowing the company's claim against the disputed demand of Rs.35.05 Lakhs(previous year Rs.35.05 Lakhs) included in the above amount as per its order dated October 5, 2016, pending appellate order effect as at the year end.
32.4 The Company does not expect any reimbursements in respect of the above contingent liabilities.
32.5 It is not practicable to estimate the timing of cash outflows, if any, in respect of matters at 32.1(a) above pending resolution of the legal proceedings. Further, the liability mentioned in 32.1(a) above excludes interest and penalty in cases where the company has determined that the possibility of such levy is remote.
33 Segment Reporting
Based on the management approach as defined in IND AS 108 - Operating Segments, the Chief Operating Decision Maker ("CODM") evaluates the company's performance and allocates resources based on an analysis of various indicators of business segment/s in which the company operates. The Company is primarily engaged in the business of Manufacturing & selling of Steel Products, which the management and CODM recognise as the sole business segment. Hence disclosure of segment-wise information is not required and accordingly not provided.
The other applicable information applicable where there is only one segment as required in accordance with IND AS 108 - Operating Segments, are as under:
(a) The company does not have the information in respect of the revenues from external customers for each product and service, or each group of similar products and services, and the cost to develop such system will be highly excessive. Accordingly such information is not disclosed as allowed by para 32 of IND AS 108.
TheBoardof DirectorshasestablishedaRisk Management Committee to oversee the company's Risk Management Framework. This committee is responsible for developing and monitoring the company's risk management policy. These policy aim to ensure timely identification and evaluation of risks, establish acceptable risk thresholds, map controls against these risks, monitor risks and their limits, enhance risk awareness and transparency. Regular reviews of risk management policy and systems are conducted to reflect changes in market conditions and company activities, providing reliable information to management and the board for evaluating the adequacy of the risk management framework in relation to the risks faced by the company.
i. Credit risk
Credit risk is the risk of financial loss to the company if a customer or counterparty to a financial instrument fails to meet its contractual obligations. The company is exposed to the credit risk from its trade receivables, financial assets and other current assets. The maximum exposure to credit risk is equal to the carrying value of the financial assets. The objective of managing counterparty credit risk is to prevent losses in financial assets.
The history of trade receivables shows no provision for bad and doubtful debts. Therefore, the Company does not expect any material risk on account of nonperformance by any of the Company's counterparties. The assessment is carried out considering the segment of customer, impact seen in the demand outlook of these segments and the financial strength of the customers.
ii. Liquidity risk
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 asset. The Company's approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are fallen due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company's reputation
Prudent liquidity risk management implies maintaining sufficient cash and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due. Due to the dynamic nature of the underlying businesses, Company treasury maintains flexibility in funding by maintaining availability under committed credit lines.
Management monitors rolling forecasts of the Company's liquidity position (comprising the undrawn borrowing facilities) and cash and cash equivalents on the basis of expected future cash flows. This is generally carried out at unit level and monitored through corporate office of the Company in accordance with practice and limits set by the Company. These limits vary by location to take into account requirement, future cash flow and the liquidity in which the entity operates. In addition, the Company's liquidity management strategy involves projecting cash flows and considering the level of liquid assets necessary to meet these, monitoring balance sheet liquidity ratios against internal and external regulatory requirements and maintaining debt financing plans.
iii. 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 result of changes in interest rates, foreign currency exchange rates, liquidity and other market changes. Future specific market movements can not be normally predicted with reasonable accuracy.
iv. Foreign currency risk
The functional currency of the company is Indian Rupees (INR), but it engages in transactions denominated in foreign currencies, thereby exposing it to exchange rate fluctuations. These fluctuations impact the company's costs of imports, particularly concerning raw materials. Adverse movements in the exchange rate between the Rupee and foreign currencies increase the company's overall debt position in Rupee terms without the company incurring additional debt.
There has been no significant impact in Company's financial postition with change in exchange rates.
v. Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. 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 borrowings of the Company are principally denominated in rupees with a mix of fixed and floating rates of interest.
Currently the Company's borrowings are within acceptable risk levels, as determined by the management, hence the Company has not taken any swaps to hedge the interest rate risk.
38 The Code on Social Security, 2020 ('Code') relating to employee benefits during employment and postemployment received Indian Parliament approval and Presidential assent in September 2020. The Code has been published in the Gazette of India and subsequently on November 13, 2020 draft rules were published and invited for stakeholders' suggestions. However, the date on which the Code will come into effect has not yet been notified. The Company will assess the impact of the Code when it comes into effect and will record any related impact in the period the Code becomes effective.
Additional Regulatory Information:
39 Title deeds of Immovable Property not held in name of the Company:
The title deeds of all the immovable properties (other than properties where the Company is the lessee and the lease agreements are duly executed in favour of the lessee), as disclosed in Note 2(a) on Property, plant and equipment to the financial statements, are held in the name of the Company.
40 There are no proceedings initiated or are pending against the Company for holding any benami property under the Prohibition of Benami Property Transactions Act, 1988 and rules made thereunder.
41 Wilful Defaulter:
i. The Company has not defaulted in repayment of loans or other borrowings or in the payment of interest thereon to any lender.
ii. The Company has not been declared wilful defaulter by any bank or financial institution or government or any government authority.
42 The Company has no transactions with companies struck off under section 248 of the Companies Act, 2013 or section 560 of the Companies Act, 1956.
43 The Registration of charge in respect of secured loans filed to ROC beyond the statutory period is NIL.
44 The company does not have any subsidiary. Therefore clause (87) of section 2 of the Act read with Companies (Restriction on number of Layers) Rules, 2017 is not applicable.
46 There is no scheme of arrangements approved by the competent authority in terms of section 230 to 237 of the companies Act, 2013 during the year.
47 The Company has not advanced or loaned or invested funds to any other person or entities, including foreign entities (Intermediaries) with the understanding that the Intermediary shall (I) 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 (ii) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
48 The Company has not received any fund from any person or entities, including foreign entities (Funding Party) with the understanding that the company shall (I) 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 (ii) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
49 The Company has not surrendered or disclosed as income or the previously unrecorded income and related assets during the year in the tax assessments which are not recorded in the books of accounts of the company.
50 The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
51 Disclosures under Rule 11(f) of the Company (Audit & Auditors) Rule, 2014 - Dividends
The final dividend on shares is recorded as a liability on the date of approval by the shareholders. The Company declares and pays dividends in Indian rupees.
The Board of Directors in their meeting held on May 17, 2024 recommended a final dividend of Rs.0.60 per equity share(subject to TDS as applicable) for the year ended March 31, 2024, subject to the approval of shareholders in the upcoming Annual General Meeting of the Company. If approved, this will result in a cash outflow of approximately Rs. 173.19 Lakhs.
52 Previous year figures have been recasted/restated wherever necessary including those as required in keeping with revised Schedule III amendments.
As per our report of even date annexed hereto. On behalf of the Board
FOR R KABRA & CO. LLP HARIOM PIPE INDUSTRIES LIMITED
Chartered Accountants
Firm Registration No: 104502W/W100721
Sd/- Sd/- Sd/-
Ram S Verma Rupesh Kumar Gupta Sailesh Gupta
(Partner) (Managing Director) (Whole Time Director)
Membership No: 038913 DIN 00540787 DIN 00540862
UDIN : 24038913BKFXFU3458 Sd/- Sd/-
Amitabha Bhattacharya Rekha Singh
Chief Financial Officer Company Secretary
Membership No: A33986
Place : Hyderabad Place: Hyderabad
Date : May 17, 2024 Date : May 17, 2024
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