1.10 Provisions, contingent liabilities, contingent assets
A provision is recognised when an enterprise has a present obligation as a result of past event 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 are measured at the present value of management's best estimate of the expenditure required to settle the present obligations at the end of the reporting period. 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 changes in the provision due to the passage of time are recognised as finance cost. Contingent liabilities are disclosed in the case of:
a) a present obligation arising from the past events, when it is not probable that an outflow of resources will be required to settle the obligation;
b) a present obligation arising from the past events, when no reliable estimate is possible; and
c) a possible obligation arising from past events, unless the probability of outflow of resources is remote.
Contingent assets are not recognised but disclosed in the financial statements when an inflow of economic benefit is probable.
1.11 Employee benefits
A. Defined contribution plans
Retirement benefit in the form of contribution to provident fund and pension fund are charged to statement of Profit and Loss.
B. Defined benefit plan (funded)
Gratuity is the nature of a defined benefit plan. Provision for gratuity is calculated on the basis of actuarial valuation carried out at reporting date and is charged to statement of profit and loss. The actuarial valuation is computed using the projected unit credit method.
Re-measurements, comprising of actuarial gains and losses, the effect of the asset ceiling, excluding amount included in net interest on the net defined benefit liability and the return on plan assets (excluding amount included in net interest on the net defined benefit liability) are recognised
immediately in the Balance Sheet with a corresponding debit or credit to retained earnings through OCI in the period in which they occur. Remeasurement is not reclassified to profit or loss in subsequent periods.
C. Other employee benefits (unfunded)
Leave encashment is recognised as an expense in the statement of profit and loss account as and when they accrue. The Company determines the liability using the projected unit credit method with actuarial valuations carried out as at balance sheet date.
1.12 Revenue recognition
Revenue from sale of goods and services
The Company derives its revenue from sale of manufactured goods & traded goods primarily from steel segment and also from royalty services in respect of franchisee arrangement. The Company recognizes revenue from sale of products & services at a time when performance obligations are satisfied and upon transfer of control of promised products and services to the customer as per the contract, in an amount that reflects the consideration, the Company expects to receive in exchange for their products or services. The Company disaggregates the revenue based on nature of products.
The revenue from sale of goods and services is net of variable consideration on account of various discounts and schemes offered by the Company.
Royalty income is recognised as per the contract when the goods are sold by the franchisee.
Sale of Power is recognised as per the agreement rates as per contract based on the unit produced.
Interest income
I nterest income is recognised using the EIR method. The EIR is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the gross carrying amount of a financial asset. When calculating the effective interest rate, the Company estimates the expected cash flows by considering all the contractual terms of the financial instruments (for example, prepayment, extension, call and similar options) but does not consider the expected credit loss.
1.13 Taxes on income
Income tax expenses comprise current tax expenses and the net change in the deferred tax asset or liabilities during the year. Current and deferred tax are recognised in statement of profit and loss, except when they relate to items that are recognised in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognised in other comprehensive income or directly in equity respectively.
Current tax
The Company provides current tax based on the provisions of the Income Tax Act, 1961 applicable to the Company.
Deferred tax
Deferred tax is recognised using the balance sheet approach. Deferred tax assets and liabilities are recognised for deductible and taxable temporary differences arising between the tax base of assets and liabilities and their carrying amount.
Deferred tax liabilities are recognised for all taxable temporary differences.
Deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused tax credits and any unused tax losses. Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilized.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilized. Unrecognised deferred tax assets are reassessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax assets to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realized or liability is settled, based on tax rates (and tax laws) that have been enacted or substantially enacted at the reporting date.
Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.
1.14 Leases
In accordance with Ind AS 116, the Company recognises right of use assets representing its right to use the underlying asset for the lease term at the lease commencement date. The cost of right of use asset measured at inception shall comprise of the amount of the initial measurement of the lease liability adjusted for any lease payments made at or before commencement date less any lease incentive received plus any initial direct cost incurred and an estimate of cost to be incurred by lessee in dismantling and removing underlying asset or restoring the underlying asset or site on which it is located. The right of use asset is subsequently measured at cost less accumulated depreciation, accumulated impairment losses, if any, and adjusted for any re-measurement of lease liability. The right of use assets is depreciated using the straight-line method from the commencement date over the shorter of lease term or useful life of right of use asset. The estimated useful lives of right of use assets are determined on the same basis as those of property, plant and equipment. Right of use assets are tested for impairment whenever there is any indication that their carrying amounts may not be recoverable. Impairment loss, if any, is recognised in statement of profit and loss.
The Company measures the lease liability at the present value of the lease payments that are not paid at the commencement date of lease. The lease payments are
discounted using the interest rate implicit in the lease, if that rate can be readily determined. If that rate cannot be readily determined, the Company uses incremental borrowing rate.
The lease liability is subsequently re-measured by increasing the carrying amount to reflect interest on lease liability, reducing the carrying amount to reflect the lease payments made and re-measuring the carrying amount to reflect any reassessment or lease modification or to reflect revised-in-substance fixed lease payments. The Company recognises amount of re-measurement of lease liability due to modification as an adjustment to write off use asset and statement of profit and loss depending upon the nature of modification. Where the carrying amount of right of use assets is reduced to zero and there is further reduction in measurement of lease liability, the Company recognises any remaining amount of the remeasurement in statement of profit and loss.
The Company has elected not to apply the requirements of Ind AS 116 to short term leases of all assets that have a lease term of 12 months or less unless renewable on long term basis and leases for which the underlying asset is of low value. The lease payments associated with these leases are recognised as an expense over lease term.
1.15 New additional amended standard adopted by the Company
Ministry of Corporate Affairs ("MCA") notifies new standards under companies (Indian Accounting Standards) Rules as issued from time to time. For the year ended 31st March, 2024, MCA has not notified any new standards or amendments to the existing standards applicable to the Company.
(c) Term/ rights attached to equity shares
The Company has only one class of equity shares having a face value of ' 10/- per share. Each holder of equity shares is entitled to one vote per share.
The repayment of equity share capital in the event of liquidation and buy back of shares are possible subject to prevalent regulations. In the event of liquidation, normally the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amount, in proportion of shareholding.
The Company has not allotted any fully paid up shares pursuant to contract(s) without payment being received in cash. The Company has neither allotted any fully paid up shares by way of bonus shares nor has bought back any class of shares during the period of five years immediately preceding the balance sheet date.
(d) Dividend
The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting except in case of interim dividend. The remittance of dividends outside India is governed by Indian law on foreign exchange.
The amount of per share dividend recognised as distributions to equity shareholders during FY 2023-24 pertaining to FY 2022-23 amounted to ' 404.03 Lakhs have been shown as deduction from retained earning.
The Board of directors of the Company in their meeting held on 6th May, 2024 have proposed a dividend @20% i.e ' 2/- per equity share for the financial year ended 31st March, 2024 for the approval of shareholders.
e) Share Warrants
(i) The Board of Directors of the Company at their meeting held on 13th January, 2024 has approved the withdrawal of the preferential Issue of 50,00,000 warrants convertible into equity shares, which was approved by the Board at their meeting held on 11th November, 2022, and subsequently approved by the shareholders of the Company at their ExtraOrdinary General Meeting held on 9th December, 2022, which could not be completed in view of seeking clarification on the issue price from regulatory authorities, the period of 12 months lapsed from the passing of the said Special Resolution, within which allotment against the said preferential issue had to be made. Therefore, Board of Directors of the Company has accorded their approval to withdraw the above said proposal of fund raising.
(ii) The Company has issued and allotted 27,50,000 (Twenty Seven Lakhs Fifty Thousand only) warrant convertible into equivalent number of equity shares, having face value of ' 10/- per equity shares, within a period of 18 months from the dated of allotment i.e 22nd February, 2024 at an issue price of ' 353/- (Rupees Three Hundred and Fifty three Only' (including premium of ' 343/- each) to individual (Non-Promoters) and Public-FPIs (Non-Promoters). The Company has received ' 2426.88/- Lakhs being 25% of the total amount payable towards subscription of the warrants from al the allotees.
The amount of ' 2426.88 Lakhs received on allotment of warrants remained unspent as at 31st March, 2024 anc kept in fixed deposits for the time being. Further there is no deviation in uses of preferential issue proceeds ol ' 2426.88 Lakhs for the period ended 31st March, 2024.
a) Securities premium:
Securities premium includes premium on issue of shares. It will be utilised in accordance with the provisions of the Companies Act, 2013.
b) Other comprehensive income:
The Company has elected to recognise changes in the fair value of certain investments in equity securities, bonds and other debt in other comprehensive income. These changes are accumulated within the FVOCI equity investments reserve within equity.
c) Retained Earning:
Represents surplus/ (deficit) in statement of profit and loss during the year, including retained earnings of transferor companies/demerged company on account of merger.
Nature of CSR Activity:
During the year company has contributed an amount of ' 5 Lakhs to Kamdhenu Jeevandhara Foundation for purchasing of land for construction of building for carrying out education & skill development programe and also medical facilities on an ongoing basis.
The Comapany has made provision of ' 71.50 Lakhs as at 31st March, 2024 and separately disclosed as "Unspent CSR Expenses" in other current financial liabilities in note 24 representing the extent to which the amount is to be transferred with in 30 days from the end of financial year 31st March, 2024. The Company has since transferred unspent CSR expenses amount of ' 71.50 Lakhs to "Kamdhenu Limited Unspent CSR account- FY 2023-24" on 30th April, 2024 in compliance with provision of section 135 (6) of Companies Act, 2013.
B) LEAVE ENCASHMENT
The provision for leave encashment based on acturial valuation has been included in provisions-current and non-current and does not require disclosure as mentioned in para 158 of Ind AS 19.
DEFINED CONTRIBUTION PLAN
The Company deposit an amount determined at fixed percentage on salary paid every month to the State Administerd Provident Fund, Employee State Insurance and Labour Welfare Fund for the benefit of employees.The total amount recognised in statement of profit and loss during the financial year is ' 121.23 Lakhs (31st March, 2023: ' 119.58 Lakhs) and is included in note 32 "employees benefit expenses".
FINANCIAL RISK MANAGEMENT
The Company’s activities expose it to variety of financial risks viz. commodity price risk, credit risk, liquidity risk and capital risk. These risks are managed by the senior management of the Company supervised by the Board of Directors to minimize potential adverse effects on the financial performance of the Company.
i) Commodity risk
Demand/supply risk are inherent in the prices of Ingot/Billet, the main raw material and also the prices of TMT bar, the main product in steel segment. The requirement of raw material is sourced on spot basis so as to float with fluctuations in the market and to guard against price volatility. The Company has also linked its sales to raw material prices so that the Company has adequate cushion to protect its margin in the event of any increase/decrease in raw material costs.
ii) Credit risk
The Company extends credit to customers in normal course of business. The Company considers factors such as credit track record in the market and past dealings for extension of credit to customers. The Company monitors the payment track record of the customers. Outstanding customer receivables are regularly monitored.
Credit risk from cash and cash equivalents and bank deposits is considered immaterial in view of the credit worthiness of the banks, the Company works with. The Company has specific policies for managing customer credit risk on an ongoing basis; these polices factor in the customer's financial position, past experience and other customer specific factors. Financial assets are written off when there is no reasonable expectation of recovery, such as a debtor failing to engage in a repayment plan with the Company. The Company makes provision for doubtful debt or writes off, when a debtor fails to make contractual payments based on provisioning matrix. When loans or receivables have either been provided for or written off, the Company continues to engage in enforcement activity to attempt to recover the receivable due. When recoveries are made, these are recognised in statement of profit and loss. The Company has followed expected credit loss (ECL) model to provide for provision for ECL allowance.
iii) 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 and 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 due, under both normal and stressed condition, without incurring unacceptable losses or risking damage to the Company's reputation.
The Company's objective is to maintain a balance between continuity of funding and flexibility through the use of surplus funds, bank overdrafts, bank loans. The Company considers liquidity risk as low risk.
iv) Interest rate risk
Interest rate is the risk that fair value or future cash flows of a financial instrument will fluctate because of changes in interest rate. Now Interest rate risk is immaterial because company has repaid all its fixed rate and variable rate bearing loans.
v) Exposure to liquidity risk
T he following are the remaining contractual maturities of financial liabilities at the reporting date. The amounts are gross and undiscounted, and include estimated interest payments and exclude the impact of netting agreements.
vi) Capital Management
The Company’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. The Company has sufficient surplus to meet its business interest and any capital risk in future.
During the year, the Company has repaid all its debts therefore debt to equity ratio for current year is not applicable.
vii) Foreign Exchange Risk
The Company does not have any foreign currency exposure, hence no foreign currency risks.
DISCLOSURE IN ACCORDANCE WITH REQUIREMENTS UNDER IND AS-10 EVENT AFTER THE REPORTING DATE:
The Board of Directors of the Company have recommended a dividend @ 20% i.e ' 2/- per equity share for the financial year ended 31st March, 2024 for the approval of shareholders. The actual dividend outgo will be dependant on share capital outstanding as on record date.
Previous years figures have been regrouped, rearranged or reclassified, whenever necessary to confirm the current year’s classification.
As per our report of even date attached
For S. S. Kothari Mehta & Co. LLP For and on behalf of board of directors of Kamdhenu Limited
Chartered Accountants
Firm Registration No. 000756N / N500441 Sd/- Sd/-
(Satish Kumar Agarwal) (Sunil Kumar Agarwal)
Chairman & Managing Director Whole Time Director
Sd/- DIN: 00005981 DIN: 00005973
Sunil Wahal
Partner
Membership No. 087294
Sd/- Sd/-
(Harish Kumar Agarwal) (Khem Chand)
Place: Gurugram Chief Financial Officer Company Secretary
Date : 6th May, 2024 (ICAI M. No. 075505) (M.No.- F10065)
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