1B.4.10 Provisions. Contingent Liabilities and Contingent Assets
(a) 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. Such provisions are determined based on management's estimate of the
amount required to settle the obligation at the balance sheet date. When the Company expects some or all of a provision to be
reimbursed, the reimbursement is recognised as a standalone asset only when the reimbursement is virtually certain.
(b) 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.
(c) Contingent liabilities are disclosed on the basis of judgment of the management. These are reviewed at each balance sheet date
and are adjusted to reflect the current management's estimate.
(d) Contingent assets are not recognized but are disclosed in the financial statements when inflow of economic benefits is
probable.
1B.4.11 Income Taxes
(a) Income-Tax expense comprises of current and deferred income tax which has been shown under the head 'Tax Expenses'.
Income tax expense is recognied in net profit in the Statement of Profit and Loss except to the extent that it relates to items
recognized directly in equity, in which case it is recognized in other comprehensive income.
(b) Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities,
based on tax rates and laws that are enacted or substantively enacted at the Balance sheet date.
(c) Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the financial
statements and the corresponding tax bases used in the computation of taxable profit.
(d) Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is
settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the
reporting period. The carrying amount of deferred tax liabilities and assets are reviewed at the end of each reporting period.
1B.4.12 Foreign Currency Transactions and Translations
(a) Transactions in foreign currencies are initially recorded at the exchange rate prevailing on the date of transaction. Monetary
assets and liabilities denominated in foreign currencies are translated at the functional currency closing rates of exchange at
the reporting date.
(b) Exchange differences arising on settlement or translation of monetary items are recognised in Statement of Profit and Loss
except to the extent of exchange differences which are regarded as an adjustment to interest costs on foreign currency
borrowings that are directly attributable to the acquisition or construction of qualifying assets, are capitalized as cost of assets.
(c) Non-monetary items that are measured in terms of historical cost in a foreign currency are recorded using the exchange rates at
the date of the transaction. Non-monetary items measured at fair value in a foreign currency are translated using the exchange
rates at the date when the fair value was measured. The gain or loss arising on translation of non-monetary items measured at
fair value is treated in line with the recognition of the gain or loss on the change in fair value of the item (i.e., translation
differences on items whose fair value gain or loss is recognised in OCI or Statement of Profit and Loss are also recognised in
OCI or Statement of Profit and Loss, respectively).
1B.4.13 Employee Benefits Expense
(a) Short Term Employee Benefits
The undiscounted amount of short term employee benefits expected to be paid in exchange for the services rendered by
employees are recognised as an expense during the period when the employees render the services.
(b) Post-Employment Benefits
A defined contribution plan is a post-employment benefit plan under which the Company pays specified contributions to a
separate entity. The Company makes specified monthly contributions towards Provident Fund, Superannuation Fund and
Pension Scheme. The Company’s contribution is recognised as an expense in the Statement of Profit and Loss during the
period in which the employee renders the related service. If the contribution payable to the scheme for service received before
the balance sheet date exceeds the contribution already paid, the deficit payable to the scheme is recognised as a liability after
deducting the contribution already paid. If the contribution already paid exceeds the contribution due for services received
before the balance sheet date, then excess is recognised as an asset to that extent.
(c) Defined Benefits Plans
(i) The cost of the defined benefit plan and other post-employment benefits and the present value of such obligation are
determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from
actual developments in the future. These include the determination of the discount rate, future salary increases, mortality
rates and future pension increases. Due to the complexities involved in the valuation and its long-term nature, a defined
benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting
date.
(ii) The Company pays gratuity to the employees whoever has completed five years of service with the Company at the time
of resignation/superannuation. The gratuity is paid @15 days salary for every completed year of service as per the
provisions ofthe Payment ofGratuity Act, 1972.
(iii) The gratuity liability amount is contributed to the approved gratuity fund formed exclusively for gratuity payment to the
employees. The gratuity fund has been approved by the governing Income-Tax authorities.
(iv) The liability in respect of gratuity and other post-employment benefits is calculated using the Projected Unit Credit
Method and spread over the period during which the benefit is expected to be derived from employees’ services.
(v) Re-measurements of defined benefit plans in respect of post-employment are charged to the Other Comprehensive
Income.
(d) Employee Separation Costs
Compensation to employees who have opted for retirement under the voluntary retirement scheme of the Company is payable
in the year of exercise of option by the employee. The Company recognises the employee separation cost when the scheme is
announced and the Company is demonstrably committed to it.
1B.4.14 Revenue from Operations
(a) Revenue from sale of goods is recognised when the significant risks and rewards of ownership have been transferred to the
buyer, recovery of the consideration is probable, the associated cost can be estimated reliably, there is no continuing effective
control or managerial involvement with the goods, and the amount of revenue can be measured reliably.
(b) Revenue from rendering of services is recognised when the performance obligation to render the services are completed as per
contractually agreed terms.
(c) Revenue from sale of goods & rendering of services is measured at the fair value of the consideration received or receivable
after taking into account contractually defined terms of payment and excluding trade discounts, volume rebates and taxes or
duties collected on behalf of the Government such as Goods and Services Tax [GST]. However, mere for the representation
purposes, in the Statement of Profit and Loss, value of sales, at once, is shown inclusive of Goods and Services Tax and
subsequently, such Goods and Services Tax are reduced.
1B.4.15 Other Income
(a) Interest Income
For all Debt Instruments measured either at Amortized Cost or at Fair Value through Other Comprehensive Income, interest
income is recorded using the Effective Interest Rate [EIR]. EIR is the rate that exactly discounts the estimated future cash
payments or receipts over the expected life of the financial instrument or a shorter period, where appropriate, to the gross
carrying amount of the financial asset or to the amortized cost of a financial liability.
(b) Dividend Income
Dividend income is recognised only when the right to receive the same is established, it is probable that the economic benefits
associated with the dividend will flow to the Company, and the amount of dividend can be measured reliably.
1B.4.16 Goods and Services Tax [GST]
The Goods and Services Tax balances, as appearing in the Balance Sheet of the Company, are subject to the reconciliation at the time
of furnishing the annual GST returns ofthe company, under the Goods and Services Tax Enactments, for the financial year 2025-26.
1B.4.17 Insurance Claims
(a) Insurance claims are accounted for on the basis of claims admitted/ expected to be admitted to the extent that there is no
uncertainty in receiving the claims.
(b) The Company is expecting the settlement of insurance claims lodged by it, within next twelve months and therefore, the
Company has classified such Insurance Claims Receivables under the head 'Other Current Assets' in the Balance Sheet.
1B.4.18 Incentives Receivable from Government
(a) VAT Incentive receivables from Government under TRIFAC are accounted for on the basis of claims admitted/ expected to be
admitted to the extent that there is no uncertainty in receiving the claims.
(b) The Company is expecting the settlement of incentive receivables lodged by it, within next twelve months and therefore, the
Company has classified such incentive receivables under the head 'Other Current Assets' in the Balance Sheet.
1B.4.19 Financial Instruments
(a) Financial Assets
(i) Initial recognition and measurement
All financial assets and liabilities are initially recognized at fair value. Transaction costs that are directly attributable to the
acquisition or issue of financial assets and financial liabilities, which are not at fair value through profit or loss, are
adjusted to the fair value on initial recognition. Purchase and sale of financial assets are recognised using trade date
accounting.
(ii) Subsequent measurement
Financial assets carried at amortised cost
A financial asset is measured at amortised cost if it is held within a business model whose objective is to hold the asset in
order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash
flows that are solely payments ofprincipal and interest on the principal amount outstanding.
Financial assets at fair value through other comprehensive income (FVTOCI)
A financial asset is measured at FVTOCI if it is held within a business model whose objective is achieved by both
collecting contractual cash flows and selling financial assets and the contractual terms of the financial asset give rise on
specified dates to cash flows that are solely payments ofprincipal and interest on the principal amount outstanding.
Financial assets at fair value through profit or loss (FVTPL)
A financial asset not classified as either amortised cost or FVOCI, is classified as FVTPL.
(iii) Investment in subsidiaries, Associates and Joint Ventures
The Company has elected to measure investment in its wholly owned subsidiaries 'Tapti Pipes & Products Ltd., FZE,
UAE' & 'Shree Venkatesh Polymers Pvt. Ltd.' and its partially owned subsidiary 'Shree Venkatesh Industries Pvt. Ltd.' at
its Fair Value .
(iv) Other Equity Investments
All other equity investments are measured at fair value, with value changes recognised in Statement of Profit and Loss,
except for those equity investments for which the Company has elected to present the value changes in ‘Other
Comprehensive Income’.
(v) Impairment of financial assets
In accordance with Ind AS 109, the Company uses ‘Expected Credit Loss’ (ECL) model, for evaluating impairment of
financial assets.
Expected credit losses are measured through a loss allowance at an amount equal to:
• The 12-months expected credit losses (expected credit losses that result from those default events on the financial
instrument that are possible within 12 months after the reporting date); or
• Full lifetime expected credit losses (expected credit losses that result from all possible default events over the life of the
financial instrument)
For trade receivables Company applies ‘simplified approach’ which requires expected lifetime losses to be recognised
from initial recognition of the receivables. The Company uses historical default rates to determine impairment loss on the
portfolio of trade receivables. At every reporting date these historical default rates are reviewed and changes in the forward
looking estimates are analysed.
For other assets, the Company uses 12 month ECL to provide for impairment loss where there is no significant increase in
credit risk. If there is significant increase in credit risk full lifetime ECL is used.
(b) Financial Liabilities
(i) Initial recognition and measurement
All financial liabilities are recognized at fair value and in case of loans, net of directly attributable cost. Fees of recurring
nature are directly recognised in the Statement of Profit and Loss as finance cost.
(ii) Subsequent measurement
Financial liabilities are carried at amortized cost using the effective interest method. For trade and other payables maturing
within one year from the balance sheet date, the carrying amounts approximate fair value due to the short maturity of these
instruments.
(iii) Derivative financial instruments and Hedge Accounting
Derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered
into and are also subsequently measured at fair value. Derivatives are carried as financial assets when the fair value is
positive and as financial liabilities when the fair value is negative. Any gains or losses arising from changes in the fair value
of derivatives are taken directly to Statement of Profit and Loss, except for the effective portion of cash flow hedges which
is recognised in Other Comprehensive Income and later to Statement of Profit and Loss when the hedged item affects profit
or loss or treated as basis adjustment if a hedged forecast transaction subsequently results in the recognition of a non¬
financial assets or non-financial liability.
Hedges that meet the criteria for hedge accounting are accounted for as follows:
Cash flow hedge
The Company designates derivative contracts or non derivative financial assets / liabilities as hedging instruments to
mitigate the risk of movement in interest rates and foreign exchange rates for foreign exchange exposure on highly
probable future cash flows attributable to a recognised asset or liability or forecast cash transactions. When a derivative is
designated as a cash flow hedging instrument, the effective portion of changes in the fair value of the derivative is
recognized in the cash flow hedging reserve being part of other comprehensive income. Any ineffective portion of changes
in the fair value ofthe derivative is recognized immediately in the Statement of Profit and Loss. If the hedging relationship
no longer meets the criteria for hedge accounting, then hedge accounting is discontinued prospectively. If the hedging
instrument expires or is sold, terminated or exercised, the cumulative gain or loss on the hedging instrument recognized in
cash flow hedging reserve till the period the hedge was effective remains in cash flow hedging reserve until the underlying
transaction occurs. The cumulative gain or loss previously recognized in the cash flow hedging reserve is transferred to
the Statement of Profit and Loss upon the occurrence of the underlying transaction. If the forecasted transaction is no
longer expected to occur, then the amount accumulated in cash flow hedging reserve is reclassified in the Statement of
Profit and Loss.
Fair Value Hedge
The Company designates derivative contracts or non derivative financial assets / liabilities as hedging instruments to
mitigate the risk of change in fair value of hedged item due to movement in interest rates, foreign exchange rates and
commodity prices.
Changes in the fair value of hedging instruments and hedged items that are designated and qualify as fair value hedges are
recorded in the Statement of Profit and Loss. If the hedging relationship no longer meets the criteria for hedge accounting,
the adjustment to the carrying amount of a hedged item for which the effective interest method is used is amortised to
Statement of Profit and Loss over the period of maturity.
(iv) Derecognition of financial instruments
The Company derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire or
it transfers the financial asset and the transfer qualifies for derecognition under Ind AS 109. A financial liability (or a part of
a financial liability) is derecognized from the Company's Balance Sheet when the obligation specified in the contract is
discharged or cancelled or expires.
1B.4.20 Operating Cycle
(a) The Company presents its assets and liabilities in the balance sheet based on current/non-current classification which is based
upon the Company's operating cycle. The Company has identified twelve months as its operating cycle.
(b) An asset is treated as current when it is:
(i) Expected to be realized or intended to be sold or consumed in normal operating cycle;
(ii) Held primarily for the purpose of trading;
(iii) Expected to be realized within twelve months after the reporting period; or
(iv) Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after
the reporting period
(c) A liability is treated as current when :
(i) It is expected to be settled in normal operating cycle;
(ii) It is incurred primarily for the purpose of trading;
(iii) It is due to be settled within twelve months after the reporting period, or
(iv) There is no unconditional right to defer the settlement ofthe liability for at least twelve months after the reporting period.
(d) Deferred tax assets and liabilities are classified as non-current assets and liabilities.
1B.4.21 Earnings Per Share
Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders by weighted
average number of equity shares outstanding during the period. The weighted average number of equity shares outstanding during the
period are adjusted for events of shares issued during the year including bonus issue.
For the purpose of calculating diluted earnings per share, the net profit or loss for the year 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.
1B.4.22 Dividend Distribution
Dividends paid is recognised in the period in which the interim dividends are approved by the Board of Directors, or in respect of the
final dividend when approved by the shareholders.
IB. 4.23 Statement of Cash Flows
(a) Cash and Cash equivalents
For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash on hand, other short¬
term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts
ofcash and which are subject to an insignificant risk ofchanges in value.
(b) The Statement of Cash Flows has been prepared under the 'Indirect Method' as set out in Indian Accounting Standard (Ind AS)
7 on 'Statement of Cash Flows'.
NOTE - 1C - CRITICALACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY
The preparation of the standalone financial statements in conformity with the Ind AS requires management to make judgments,
estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities and
disclosures as at date of the financial statements and the reported amounts of the revenues and expenses for the years presented. The
estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual
results may differ from these estimates under different assumptions and conditions. The estimates and underlying assumptions are
reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the
revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.
IC. 1 Depreciation / amortisation and useful lives of property plant and equipment / intangible assets
Property, Plant and Equipment / Intangible assets are depreciated / amortised over their estimated useful lives, after taking into
account estimated residual value. Management reviews the estimated useful lives and residual values of the assets annually in order to
determine the amount of depreciation / amortisation to be recorded during any reporting period. The useful lives and residual values
are based on the Company’s historical experience with similar assets and take into account anticipated technological changes. The
depreciation / amortisation for future periods is revised if there are significant changes from previous estimates.
1C.2 Recoverability of Trade Receivable
Judgments are required in assessing the recoverability of overdue trade receivables and determining whether a provision against those
receivables is required. Factors considered include the credit rating of the counterparty, the amount and timing of anticipated future
payments and any possible actions that can be taken to mitigate the risk of non-payment.
1C.3 Provisions
Provisions and liabilities are recognized in the period when it becomes probable that there will be a future outflow of funds resulting
from past operations or events and the amount of cash outflow can be reliably estimated. The timing of recognition and quantification
of the liability requires the application of judgment to existing facts and circumstances, which can be subject to change. The carrying
amounts of provisions and liabilities are reviewed regularly and revised to take account of changing facts and circumstances.
1C.4 Impairment ofnon-financial assets
The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, the
Company estimates the asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or Cash Generating Units
(CGU’s) fair value less costs of disposal and its value in use. It is determined for an individual asset, unless the asset does not generate
cash inflows that are largely independent of those from other assets or a groups of assets. Where the carrying amount of an asset or
CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.
In assessing value in use, the estimated future cash flows are discounted to their present value using pre-tax discount rate that reflects
current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs of
disposal, recent market transactions are taken into account, if no such transactions can be identified, an appropriate valuation model is
used.
1C.5 Impairment of financial assets
The impairment provisions for financial assets are based on assumptions about risk of default and expected cash loss rates. The
Company uses judgment in making these assumptions and selecting the inputs to the impairment calculation, based on Company’s
past history, existing market conditions as well as forward looking estimates at the end of each reporting period.
Notes: (i) The entire Insurance Claim is receivable by the Company against the losses of Property, Plant and Equipment and Inventories
occurred in earlier years. The Company has written-off the partial insurance claim and the remaining claim is expected to be
settled in the financial year 2026-27. The Management consider the same as good for recovery and therefore, no provision for
impairment of the value of such claim has been considered necessary.
(ii) The incentives receivables from Government by the Company is the VAT amount receivable under TRIFAC Subsidiary Scheme.
The Company is expecting that such incentive will be received in the financial year 2026-27. The Management consider the same
as good for recovery and therefore, no provision for impairment of the value of such claim has been considered necessary.
F. Rights, Preferences and restrictions attached to Equity Shares
The Company has issued only one class of equity shares having face value of Rs. 10/- per share. Each shareholder is eligible for one vote per
share held. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company, after distribution of
all preferential amounts, in proportion to their shareholding.
G. Allotment of Bonus Shares/Buy Back of shares
There are no shares allotted as fully paid up by way of bonus shares or allotted as fully paid up pursuant to contract without payment being
received in cash, or bought back during the period of five years immediately preceding the reporting date. There are no securities which are
convertible into equity shares.
(i) It is not practicable for the Company to estimate the timings of cash outflows, if any, in respect of the above pending resolution of the
respective proceedings.
(ii) The Company does not expect any reimbursements in respect of the above contingent liabilities
(iii) Future cash outflows in respect of the above matters are determined only on receipt of judgments/ decisions pending at various forums/
authorities.
(iv) The Company's pending litigations comprise of claims against the Company pertaining to proceedings pending with Excise, Income Tax,
Sales/ VAT tax and other authorities. The Company has reviewed all its pending litigations and proceedings and has adequately provided
for where provisions are required and disclosed as contingent liabilities where applicable, in its financial statements. The Company does
not expect the outcome of these proceedings to have a materially adverse effect on its financial statements
NOTE - 39 - DISCLOSURES AS PER IND AS 116 "LEASES”
APPLICATION OF IND AS 116
Ministry of Corporate Affairs (“MCA”) through Companies (Indian Accounting Standards) Amendment Rules, 2019 and Companies (Indian
Accounting Standards) Second Amendment Rules, has notified Ind AS 116 Leases, which replaces the existing lease standard, Ind AS 17
Leases, and other interpretations. Ind AS 116 sets out the principles for the recognition, measurement, presentation and disclosure of leases for
both lessees and lessors. It introduces a single, on-balance sheet lease accounting model for lessees.
The Company has adopted Ind AS 116, effective annual reporting period beginning 1st April, 2021 and applied the standard to its leases.
Accordingly, the Company has measured its lease liability as at 1st April, 2021 at the present value of the remaining lease payments, discounted
using the interest rate of 8.95% p.a. implicit in the lease at the date oftransition to Ind AS.
The Right-of-Use Asset has been recognised at an amount equal to the lease liability. Accordingly, a Right-of-Use asset of Rs. 1371.53 Lakhs
has been recognized in F.Y. 2021-22. The cumulative effect on transition in retained earnings net off taxes is Rs. Nil.
On application of Ind AS 116, the nature of expenses has changed from lease rent in previous periods to depreciation cost for the Right-of-Use
asset, and finance cost for interest accrued on lease liabilities.
The Company does not have an option to purchase such leasehold land at the end of the lease period. There are no restrictions such as those
concerning dividends, additional debts and further leasing imposed by the lease agreements.
Ind AS 116 has resulted in an increase in net cash inflows from operating activities and an increase in cash outflows from financing activities on
account of lease payments. The principal and interest portion of the lease payments have been disclosed under cash flow from financing
activities which for the year ended March 31st, 2026, aggregating to Rs. 280.36 Lakhs (Previous Year Rs. 250.54 Lakhs).
For movement in Right-of-Use Asset Refer Note 3 and movement in Lease Liability during the year is as follows :
1 The estimates of rate of escalation in salary considered in actuarial valuation, take into account inflations, seniority, promotion and
other relevant factors including supply and demand in the employment market. The above information is certified by the actuary.
2 The expected contribution for Defined Benefit Plan for the next financial year will be in line with F.Y. 2025-26.
3 The company makes provident fund (PF) contributions to defined contribution benefit plans for eligible employees. Under the scheme
the company is required to contribute a specified percentage of the payroll costs to fund the benefits. The contributions specified under
the law are paid to the government authorities.
4 Amount towards Defined Contribution Plan have been recognized under Contribution to Provident and Other funds in Note 32.
5 Defined Benefit Plan:
The Company has defined benefit plans for gratuity to eligible employees, contributions for which are made to Life Insurance Corporation of India,
who invests the funds as per IRDA guidelines. The details ofthese defined benefit plans recognized in the financial statements are as under:
General Description of the Plan
The Company operates a defined benefit plan (the Gratuity Plan) covering eligible employees, which provides a lump sum payment to vested
employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employees salary and the
tenure of employment.
The defined benefit plans typically expose the company to various risk such as :
(a) Investment risk:
The present value of the defined benefit plan liability is calculated using a discount rate which is determined by reference to market yields at
the end of the reporting period on government bonds. If the return on plan asset is below this rate, it will create plan deficit.
(b) Interest risk:
A decrease in the bond interest rate will increase the plan liability; however, this will be partially offset by an increase in the plan assets.
(c) Longevity risk:
The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both
during and after their employment. An increase in the life expectancy of the plan participants will increase the plan's liability.
(d) Salary risk:
The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. As such, an
increase in the salary of the plan participants will increase the plan's liability.
(i) Penalty under Section 15HA of the Securities and Exchange Board of India Act, 1992
During the Financial Year 2022-23 the company was initially imposed with a penalty of Rs. 10.00 Crores by an Order passed on 28th June,
2022 by the Adjudicating Officer ofthe SEBI under section 15HA ofthe Securities and Exchange Board of India Act, 1992. However, upon
Appeal, the same was restricted to a sum of Rs. 25.00 Lakhs by the Order dated 30-09-2022 passed by the Securities Appellate Tribunal,
Mumbai. Accordingly, during the financial year 22-23, the company had made a payment of Rs. 25.00 Lakhs towards such penalty, which
was debited by the company to the statement of profit or loss under 'Note No.34 of-Exceptional Items'.
(ii) Directions issued by the Securities and Exchange Board of India [SEBI1 to the Company
The Securities and Exchange Board of India (SEBI) vide its Final Order dated February 28th, 2023 passed under sections 11(1), 11(4) and
11B of the Securities and Exchange Board of India Act, 1992 in the matter of GDRs issued by the company during the financial year 2011¬
12 has issued certain directions. The gist of the directions issued are enumerated as under:
a) The company has been restrained from accessing the securities market and further, prohibited from buying, selling or otherwise
dealing in securities including units of mutual funds, directly or indirectly, or being associated with the securities market in any
manner, whatsoever, for a period of 3 years from the date ofthe Order.
b) The company would continue to pursue measures to bring back the outstanding amount of USD 3.49 million, the GDR proceeds into
its bank account in India within a period of one year from the date ofthe Order. The Directors of the company have also been directed to
ensure the compliance of such direction.
c) The Key Managerial Persons named as Mr. Sanjay Kumar Agrawal and Mr. Vijay Prasad Pappu shall be restrained from accessing the
Indian securities market, and further prohibited from buying, selling or otherwise dealing in securities including units of mutual funds,
directly or indirectly, or being associated with the securities market in any manner, for a period of 3 years.
(iii) Steps taken by the Management of the Company in compliance of the directions issued by the SEBI
The Company has filed an Appeal before the Hon'ble Securities Appellate Tribunal, Mumbai against the said Order dated 28.02.2023
passed by the Whole Time Member of SEBI. After various hearings and orders, the matter is pending before the said authority. However,
the amount of USD 3.49 million as mentioned by SEBI, was already received by 'Tapti Pipes & Products Limited FZE', the wholly owned
subsidiary of Texmo in September, 2012 and had additionally furnished a Certificate from a Chartered Accountant stating the same before
the Tribunal.
In response to such appeal, the Hon’ble Securities Appellate Tribunal, Mumbai vide its Order dated October 24, 2024 read with Order
dated December 17, 2024 remand back the case to SEBI by quashing out the directions issued against the Company and concerned
Directors of the said impugned Order.
The SEBI has passed fresh Order on February 20, 2025, by giving relief to the Company and Key Managerial Persons in respect of
restrained from assessing the security market and prohibited from dealing in securities which imposed by earlier Order. However, in such
order direction was given to Company to bring the amount lying with Tapti Pipes & Products Limited FZE. The Company has again filed an
Appeal before the Hon'ble Securities Appellate Tribunal, Mumbai. The matter is pending before the said Authority.
(b) Foreign Currency Risk:
The Company undertakes transactions denominated in foreign currency (mainly US Dollar) which is subject to the risk of exchange rate
fluctuations. Financial assets and liabilities denominated in foreign currency, including the Company’s net investments in foreign
operations (with a functional currency other than Indian Rupee), are also subject to reinstatement risks.
The carrying amount of foreign currency denominated financial assets and liabilities including derivative contracts, are as follows:
Sensitivity analysis of 1% change in exchange rate at the end of reporting period net of hedges
(c) Foreign Currency Sensitivity
For every percentage point change in the underlying exchange rate of the outstanding foreign currency denominated assets and liabilities,
including derivative contracts, holding all other variables constant, the profit before tax for the year ended 31st March, 2026 would change
by 12520.51 USD [Previous Year - 12520.51 USD]. However, the management of the Company does not expects its foreign currency
denominated financial assets to mature within a period of five years from the end of the year under review.
(d) Interest Rate Risk
Interest rate risk is the risk that the future cash flow with respect to interest payments on borrowing will fluctuate because of change in
market interest rates. The company's exposure to the risk of changes in market interest rates relates primarily to the Company's long-term
debt obligation with floating interest rates.
(e) Interest Rate Sensitivity
Interest rate risk is measured by using the cash flow sensitivity for changes in variable interest rates. Any movement in the reference rates
could have an impact on the Company’s cash flows as well as costs.
The Company is subject to variable interest rates on some of its interest bearing liabilities. The Company’s interest rate exposure is mainly
related to debt obligations. The Company also uses a mix of interest rate sensitive financial instruments to manage the liquidity and fund
requirements for its day to day operations like short term loans.
As at March 31st, 2026, financial liability of Rs. 2106.17 lakhs was subject to variable interest rates. Increase/decrease of 100 basis points
in interest rates at the balance sheet date would result in decrease/increase in profit/(loss) before tax of Rs. 1.49 Lakhs for the year ended
March 31st, 2026.
The model assumes that interest rate changes are instantaneous parallel shifts in the yield curve. Although some assets and liabilities may
have similar maturities or periods to re-pricing, these may not react correspondingly to changes in market interest rates. Also, the interest
rates on some types of assets and liabilities may fluctuate with changes in market interest rates, while interest rates on other types of assets
may change with a lag.
The risk estimates provided assume a parallel shift of 100 basis points interest rate across all yield curves. This calculation also assumes
that the change occurs at the balance sheet date and has been calculated based on risk exposures outstanding as at that date. The period end
balances are not necessarily representative of the average debt outstanding during the period.
(Note: The impact is indicated on the profit/(loss) before tax basis).
(f) Commodity Price Risk
Commodity price risk arises due to fluctuation in prices of raw material. The company has a risk management frame work aimed at
prudently managing the risk arising from the volatility in raw material prices and freight costs. The company's commodity risk is managed
centrally through well-established trading operations and control processes. In accordance with the risk management policy, the Company
carefully calibrates the timing and the quantity of purchase.
(g) Credit Risk
Credit risk is the risk that a customer or counterparty to a financial instrument fails to perform or pay the amounts due causing financial loss
to the company. Credit risk arises mainly from the outstanding receivables from customers. The company has a prudent and conservative
process for managing its credit risk arising in the course of its business activities. The credit ratings/market standing of the customers are
evaluated on a regular basis.
(h) Liquidity Risk
Liquidity risk arises from the Company's inability to meet its cash flow commitments on time. Prudent liquidity risk management implies
maintaining sufficient stock of cash and marketable securities . The Company maintains adequate cash and cash equivalents along with the
need based credit limits to meet the liquidity needs.
(i) Hedge Accounting
The Company has established risk management policies to hedge the volatility arising from exchange rate fluctuations in respect of firm
commitments and highly probable forecast transactions, through foreign exchange forward and options contracts. The proportion of
forecast transactions that are to be hedged is decided based on the size of the forecast transaction and market conditions. As the counterparty
for such transactions are highly rated banks, the risk of their non-performance is considered to be insignificant.
The Company uses derivatives to hedge its exposure to changes in movement in foreign currency. Where such derivatives are not
designated under hedge accounting, changes in the fair value of such hedges are recognised in the Statement of Profit and Loss.
The Company may also designate certain hedges, usually for large transactions, as a cash flow hedge under hedge accounting, with the
objective of shielding the exposure from variability in cash flows. The currency, amount and tenure of such hedges are generally matched to
the underlying transaction(s). Changes in the fair value of the effective portion of cash flow hedges are recognised as cash flow hedging
reserve in Other Comprehensive Income. While the probability of such hedges becoming ineffective is very low, the ineffective portion, if
any, is immediately recognised in the Statement of Profit and Loss.
The management of the Company does not expects its foreign currency denominated financial assets to mature within a period of five years
from the end of the year under review and therefore, it has not entered into any hedging contracts for the same.
NOTE - 46 - ADDITIONAL REGULATORY INFORMATION
(i) During the financial year 2025-26, no proceeding has been initiated or pending against the company for holding any benami property under
the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder.
(ii) The Company has filed quarterly returns or statements with the banks in lieu of sanctioned working capital facilities, which are in agreement
with the books of account other than those as set out. below:
(iii) The company is not declared a wilful defaulter by any bank or financial institution or any other lender.
(iv) The company has not entered into any material transaction with the companies struck-off under s. 248 of the Companies Act, 2013 or
section 560 ofthe Companies Act, 1956 during the year.
(v) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
(vi) The company has complied with the number of layers prescribed under clause (87) of section 2 of the Act read with Companies
(Restriction on number of Layers) Rules, 2017
(vii) The company has not applied for any Scheme of Arrangements in terms of Sections 230 to 237 ofthe Companies Act, 2013.
(viii) No funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of
funds) by the Company to or in any other person(s) or entity(ies), including foreign entities (“Intermediaries”) with the understanding,
whether recorded in writing or otherwise, that the Intermediary shall lend or invest in party identified by or on behalf of the Company
(Ultimate Beneficiaries). The Company has not received any fund from any party(s) (Funding Party) with the understanding that the
Company shall whether, directly or indirectly lend or invest in other persons or entities identified by or on behalf of the Company
(“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf ofthe Ultimate Beneficiaries.
(ix) The Company has no 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).
(x) The Company has not traded or invested in Crypto Currency or Virtual Currency during the Financial Year 2025-26.
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