2.3.10 Provisions
General 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. Where the Company expects some or all of a provision to be reimbursed, for example
under an insurance contract, the reimbursement is recognized as a separate asset but only when the
reimbursement is virtually certain. The expense relating to a provision is presented in the statement of
profit or loss net of any reimbursement. 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
recognized as a finance cost.
2.3.11 Employee Benefits
Employee benefits are all forms of consideration given by the company in exchange for service
rendered by employees. Employee benefits include: short-term employee benefits, post-employment
benefits and other long-term employee benefits.
Short Term Employee Benefits
When an employee has rendered service to the company during an accounting period, the
company recognises the undiscounted amount of short-term employee benefits expected to be
paid in exchange for that service as a liability (accrued expense), after deducting any amount
already paid and as an expense. Accumulated leave, which is expected to be utilized within the next
twelve months, is treated as short-term employee benefit. The Company measures the expected
cost of such absences as the additional amount that it expects to pay as a result of the unused
entitlement that has accumulated at the reporting date.
Defined Contribution Plan
Defined contribution plans are post-employment benefit plans under which an entity pays fixed
contributions into a separate entity (a fund) and will have no legal or constructive obligation to pay
further contributions if the fund does not hold sufficient assets to pay all employee benefits relating to
employee service in the current and prior periods.
When an employee has rendered service during the year, the company recognises the contribution
payable to a defined contribution plan in exchange for that service as a liability (accrued expense)
and as an expense.
Defined Benefit Plan
Defined benefit plans are those plans that provide guaranteed benefits to certain categories of
employees, either by way of contractual obligations or through a collective agreement.
The company operates unfunded defined benefit plan. The cost of providing benefits is determined
using the projected unit credit method, with actuarial valuations being carried out at each fiscal year
end. The obligation recognized in the consolidated statements of financial position represents the
present value of the defined benefit obligation.
The present value of the defined benefit obligation is determined by discounting the estimated
future cash outflows using interest rates of high-quality corporate bonds that are denominated
in the currency in which the benefits will be paid, and that have terms to maturity approximating
to the terms of the related pension obligation. Actuarial gains and losses arising from experience
adjustments and changes in actuarial assumptions are charged or credited to other comprehensive
income in the period in which they arise.
Current service cost, which is the increase of the present value of the defined benefit obligation
resulting from the employee service in the current period, is recorded as an expense as part of cost
of sales and selling, general and administrative expenses in the statement of profit and loss. The
interest cost, which is the change during the period in the defined benefit liability that arises from the
passage of time, is recognized as part of financing costs in the statement of profit and loss.
2.3.12 Foreign Currencies
The Company's financial statements are presented in Indian Rupees (INR), which is also the company's
functional currency. Transactions in foreign currencies are initially recorded by the Company at the
functional currency spot rate at the date the transaction first qualifies for recognition.
Monetary assets and liabilities denominated in foreign currencies are retranslated at the functional
currency spot rate of exchange ruling at the reporting date. Differences arising on settlement or
translation of monetary items are recognized in profit or loss.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated
using the exchange rates as at the dates of the initial transactions. Non-monetary items measured
at fair value in a foreign currency are translated using the exchange rates at the date when the fair
value is determined. The gain or loss arising on translation of non-monetary measured at fair value is
treated in line with the recognition of gain or loss on change in fair value in the item.
2.3.13 Income Tax
Tax expense comprises of current tax and deferred tax. Current income tax is measured at the amount
expected to be paid to the tax authorities in accordance with the Income Tax Act, 1961 enacted
in India and tax laws prevailing in the respective tax jurisdictions where the Company operates. The
tax rates and tax laws used to compute the amount are those that are enacted or substantively
enacted, at the reporting date. Deferred Tax Expense or Income arises due to temporary differences
are differences between the carrying amount of an asset or liability in the statement of financial
position and its tax base. Temporary differences may be either taxable temporary differences,
which are temporary differences that will result in taxable amounts in determining taxable profit (tax
loss) of future periods when the carrying amount of the asset or liability is recovered or settled or
deductible temporary differences, which are temporary differences that will result in amounts that
are deductible in determining taxable profit (tax loss) of future periods when the carrying amount
of the asset or liability is recovered or settled. A deferred tax asset is recognised for all deductible
temporary differences to the extent that it is probable that taxable profit will be available against
which the deductible temporary difference can be utilised. A deferred tax liability is recognised for all
taxable temporary differences.
2.3.14 Inventories
Inventories are valued at the lower of cost and net realisable value.
Costs incurred in bringing each product to its present location and condition are accounted for as
follows:
i. Raw materials and Stores and spares: cost includes cost of purchase and other costs incurred
in bringing the inventories to their present location and condition. Cost is determined on first in,
first out basis.
ii. Finished goods and work in progress: cost includes cost of direct materials and labour and a
proportion of manufacturing overheads based on the normal operating capacity but excluding
borrowing costs. Cost is determined on first in, first out basis.
iii. Traded goods: cost includes cost of purchase and other costs incurred in bringing the inventories
to their present location and condition. Cost is determined on weighted average basis.
Net realisable value is the estimated selling price in the ordinary course of business, less estimated
costs of completion and the estimated costs necessary to make the sale.
2.3.15 Segment Reporting
Identification of segments
The Company's operating business are organized and managed separately according to the nature
of products and services provided, with each segment representing a strategic business unit that
offers different products/services. The Company operates in two geographical segments: Domestic
and International markets.
Allocation of common costs
Common allocable costs are allocated to each segment according to the relative contribution of
each segment to the total common costs.
Unallocated items
Unallocated items include general corporate income and expense items which are not allocated to
any business segment.
Segment accounting policies
The Company prepares its segment information in conformity with the accounting policies adopted
for preparing and presenting the financial statements of the Company as a whole.
2.3.16 Earnings per share
Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to
equity shareholders by the weighted average number of equity shares outstanding during the period.
For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable
to equity shareholders and weighted average number of shares outstanding during the period is
adjusted for the effects of all dilutive potential equity shares.
2.3.17 Contingent Liabilities
A provision is recognized 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 not discounted to its present value and are
determined based on best estimate required to settle the obligation at the balance sheet date.
These are reviewed at each balance sheet date and adjusted to reflect the current best estimates.
3. Recent accounting pronouncements
Ministry of Corporate Affairs ("MCA") notifies new standards or amendments to the existing standards
under Companies (Indian Accounting Standards) Rules as issued from time to time. For the year
ended March 31, 2025, MCA has not notified any new standards or amendments to the existing
standards applicable to the Company.
Nature and purpose of reserves:
Capital reserve:
Capital reserve is a type of reserve that is created out of capital profits, not from the regular operations of a business.
It can be utilized to write off capital losses, such as loss on the sale of fixed assets or reduction in the value of
investments.
Capital redemption reserve:
The Capital Redemption Reserve (CRR) is a statutory reserve created when a company redeems its own shares out
of profits that would otherwise be available for dividend. It can only be used for issuing fully paid bonus shares to
shareholders.
Securities premium:
Securities Premium is credited when shares are issued at premium. It is utilized in accordance with the provisions of
Act, to issue bonus shares, to provide for premium on redemption of shares, write-off equity related expenses like
underwriting cost etc.
General reserve:
General Reserve is created out of the profits earned by the Company by way of transfer from surplus in the statement
of profit and loss. The Company can use this reserve for payment of dividend, issue of bonus shares and fully / partly
paid-up equity shares.
Zero coupon warrant:
A zero coupon warrant is a financial instrument issued by a company that gives the holder the right to buy shares of
the company at a specific price in the future.
Retained earnings:
Retained earnings represents undistributed profits of the Group which can be distributed to its equity shareholders in
accordance with the provisions of the Companies Act, 2013.
a. Vehicle loans
Vehicle loans carry varies interest rate from 6.85% to 10.5% and are repayable within 5 years. These
loans are secured by hypothecation of vehicles purchased for which loan is taken.
b. Foreign currency Term loan
^ 123.19 lakhs, ?41.88 lakhs, ?68.57 lakhs and ?97.29 lakhs loans are taken in foreign currency carrying interest
rate linked to the LIBOR / SOFR 5.22%, 4.57%, 4.07% and 3.20% respectively all repayable monthly instalments
upto February, 2026. The loan is secured by first pari-passu charge on movable fixed assets of the company
both present and future and equatable mortgage of immovable Murthal property in addition by second charge
on current assets of the company and guaranteed by directors namely Mr. Ashok Kumar Bhatia and Mr. Sanjay
Bhatia.
c. Term Loan From Banks
The Company has outstanding a secured term loan amounting to ?44.43 lakhs, bearing interest at the rate of
9.95% per annum. The loan is repayable in monthly instalments and is scheduled to be fully repaid by February
2026. The loan is secured by a pari-passu first charge on the Company's movable fixed assets, both present and
future, and by an equitable mortgage of the Company's immovable property located at Murthal. It is further
secured by a second charge on the current assets of the Company. The loan is also personally guaranteed by
the directors, Mr. Ashok Kumar Bhatia and Mr. Sanjay Bhatia.
The Company has availed a secured term loan of ?2,024.97 lakhs, carrying interest at 8.95% per annum. The
loan is repayable in monthly instalments commencing from January 2024 and continuing up to June 2029.
The loan is secured by an exclusive charge over the land acquired and building under construction for the
new manufacturing unit at Panchi Gurjan, Ganaur. Additionally, it is secured by a first pari-passu charge on the
Company's movable fixed assets (both present and future) and a second pari-passu charge on the current
assets of the Company. The facility is further backed by personal guarantees from directors, Mr. Ashok Kumar
Bhatia and Mr. Sanjay Bhatia.
The Company has availed a further secured term loan amounting to ?2,143.96 lakhs, carrying an interest rate of
8.95% per annum. The loan is repayable in monthly instalments commencing from July 2024 and is scheduled
to be fully repaid by December 2029. The loan is secured by a pari-passu first charge by way of equitable
mortgage on the immovable property of the Company's Murthal unit, along with a first pari-passu charge on
the movable fixed assets (both present and future). It also carries a second pari-passu charge on the current
assets of the Company. The loan is additionally secured by personal guarantees provided by directors, Mr. Ashok
Kumar Bhatia and Mr. Sanjay Bhatia.
The Company has availed an additional secured term loan of ?366.54 lakhs, bearing interest at 8.95% per
annum. The loan is repayable in monthly instalments commencing from July 2023 and is scheduled to be fully
repaid by December 2029.This loan is secured by a pari-passu first charge through equitable mortgage on
the immovable property of the Company's Murthal unit. It is further secured by a first pari-passu charge on the
Company's movable fixed assets (both present and future), and a second pari-passu charge on the current
assets of the Company. The loan is also backed by personal guarantees provided by the directors, Mr. Ashok
Kumar Bhatia and Mr. Sanjay Bhatia.
The Company has availed a further secured term loan amounting to ?695.83 lakhs, bearing interest at 8.95%
per annum. The loan is repayable in monthly instalments commencing from October 2025 and is scheduled to
be fully repaid by March 2031.The loan is secured by a pari-passu first charge by way of equitable mortgage on
the immovable property situated at the Company's Murthal unit. It is also secured by a first pari-passu charge on
the Company's movable fixed assets (both present and future) and a second pari-passu charge on its current
assets. Additionally, the loan is guaranteed by directors, Mr. Ashok Kumar Bhatia and Mr. Sanjay Bhatia.
32. Segment reporting
Segments are identified in line with Ind AS-108, "Operating Segment" [specified under the section
133 of the Companies Act 2013 (the Act)] read with Companies (Indian Accounting Standards) Rule
2015 (as amended from time to time) and other relevant provision of the Act, taking into consideration
the internal organization and management structure as well as differential risk and return of the
segment.
A. Operating segments
- Manufacturing
- Trading
B. Identification of segments
The chief operational decision maker monitors the operating results of its business segment separately
for the purpose of making decision about resource allocation and performance assessment.
Segment performance is evaluated based on profit or loss and is measured consistently with profit and loss
in the financial statements. Operating segment have been identified on the basis of criteria specified in the
Ind AS 108.
C Segment revenue and results
The expenses and income which are not directly attributable to any business segment are shown as
unallocated expenditure
The primary segment reporting format is determined to be business segments as the company's risks and
rates of return are affected predominantly by differences in the nature of services rendered. Secondary
information is reported geographically. The operating businesses are organized and managed separately
according to the nature of the services provided, with each segment representing a strategic business unit
that offers different services and serves different markets.
The preparation of the company's financial statements requires management to make judgements, estimates
and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the
accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions
and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or
liabilities affected in future periods.
Judgements
In the process of applying the company's accounting policies, management has made the following
judgements, which have the most significant effect on the amounts recognised in the financial statements:
Taxes
Significant judgements are involved in determining the provision for income taxes, including amount expected
to be paid/recovered for uncertain tax positions.
The company reviews the carrying amount of deferred tax assets at the end of each reporting period. The policy
for the same is explained in note 2.3.13.
Useful life of property, plant and equipment
The company reviews the useful life of property, plant and equipment at the end of each reporting period. This
reassessment may result in change in depreciation expense in future periods.
Provisions and contingent liabilities
A provision is recognised when the company has a present obligation as a result of past event if 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 (excluding retirement benefits and leave encashment) are not discounted to its present
value and are determined based on best estimate required to settle the obligation at the Balance sheet date.
These are reviewed at each Balance sheet date and adjusted to reflect the current best estimates. Contingent
liabilities are not recognised in financial statements. A contingent asset is neither recognised nor disclosed in the
financial statements.
Defined benefit plans (gratuity benefits)
The cost of the defined benefit gratuity plan and the present value of the gratuity 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
and mortality rates. 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.
The parameter most subject to change is the discount rate. In determining the appropriate discount rate for
plans operated in India, the management considers the interest rates of government bonds in currencies
consistent with the currencies of the post-employment benefit obligation.
The mortality rate is based on publicly available mortality tables. Those mortality tables tend to change only
at interval in response to demographic changes. Future salary increases and gratuity increases are based on
expected future inflation rates for the respective countries.
Further details about gratuity obligations are given in note 31.
Fair value measurement of financial instruments
When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be
measured based on quoted prices in active markets, their fair value is measured using valuation techniques
including the DCF model. The inputs to these models are taken from observable markets where possible, but
where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include
considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors
could affect the reported fair value of financial instruments. Carrying value and approximate fair values of
financial instruments are same.
35. Financial risk management objectives and policies
The company's activities expose it to a variety of financial risks: market risk, credit risk and liquidity risk. The primary
market risk to the Company is foreign exchange risk. The Company's exposure to credit risk is influenced mainly
by the individual characteristic of each customer and the concentration of risk from the top few customers.
Market risk
The company is exposed to foreign exchange risk through its sales and services outside India, and purchases
and services from overseas suppliers in various foreign currencies. The exchange rate between the rupee and
foreign currencies may fluctuate substantially in the future. Consequently, the results of the company's operations
are adversely affected as the rupee appreciates / depreciates against these currencies.
The foreign currency risks from financial instruments as of March 31, 2025 were as follows:
Credit risk
Credit risk refers to the risk of default on its obligation by the counterparty resulting in a financial loss. Trade
receivables are typically unsecured and are derived from revenue earned from customers located primarily in
India. Credit risk has always been managed by the company through credit approvals, establishing credit limits
and continuously monitoring the creditworthiness of customers to which the company grants credit terms in the
normal course of business.
Credit risk on cash and cash equivalents is limited as the company generally invest in deposits with banks.
Liquidity risk
The company's principal sources of liquidity are cash and cash equivalents and the cash flow that is generated
from operations. The Company believes that the working capital is sufficient to meet its current requirements.
36. Commitments and contingencies
a. Leases
Operating lease commitments — Company as lessee
The company has entered into operating leases on immovable properties and plant and machinery, with lease
terms upto six years.
The company has paid ^13.30 lakhs (March 31, 2024: ? 13.16 lakhs) during the year towards minimum lease
payment.
2016-17, following a Removal of Difficulty order dated December 11, 2024.The Company is currently
seeking legal advice on the matter. Based on its assessment and in view of the ongoing legal proceedings,
the Company believes that there is no present obligation enforceable by law at this stage. Accordingly,
a total amount of f 89.86 lakhs has been disclosed as a contingent liability, and no provision has been
recognized in the financial statements.
(ii) The company had purchased 7.55 bighas of land in Katha Baddi, Himachal Pradesh in FY 2006-07 for
f 189.84 lakhs to set up an industrial unit. Due to a change in central tax policy, the project could not be
established within the prescribed period under section 118 of the Himachal Pradesh Tenancy and Land
Reform Act, 1972. The District Collector (DC), Solan, initiated acquisition proceedings under the Act. While
the Divisional Commissioner decided in favor of the Company on appeal, the State Government filed a
revision petition before the Financial Commissioner (Appeals), who remanded the matter back to the DC,
Solan. The DC has filed a writ petition before the Hon'ble High Court of Himachal Pradesh, which is currently
pending. Considering the legal position and uncertainty of outcome, the Company has disclosed the land
cost of f 189.84 lakhs as a contingent liability. No provision has been recognized as the obligation is not
considered probable at this stage.
(iii) A demand order dated December 19, 2023 was issued by the Joint Commissioner of Central Tax -
Delhi East, raising a service tax liability of f 1.72 crores on the company. The company's appeal before
the Commissioner (Appeals) was rejected vide order dated June 3, 2024, confirming the demand.
Subsequently, the company filed a further appeal before the Customs, Excise and Service Tax Appellate
Tribunal (CESTAT) on August 27, 2024, which is currently pending. Based on legal advice and management
assessment, the company believes it has a strong case on merits. Accordingly, no provision has been
made in the books of account, and the amount has been disclosed as a contingent liability.
(iv) The company received a show cause notice dated July 31,2024 from the Additional Commissioner, CGST
Delhi North, alleging non-payment of Goods and Services Tax (GST) amounting to f373.60 lakhs, along
with applicable interest and penalties. Following the adjudication process, the Assistant Commissioner
(Adjudication), CGST Delhi North, passed an order dated January 21, 2025, confirming the demand for
GST amounting to f 373.60 lakhs, together with interest and penalties. The company has filed an appeal
against the said adjudication order before the Commissioner (Appeals) on April 1 1 , 2025. The appeal
is currently pending disposal. Based on legal advice obtained and management's assessment, the
Company believes that it has a meritorious case and accordingly, no provision has been made in the
financial statements for the said demand.
40. Other Statutory Information
i) The company does not have any Benami properly, where any proceeding has been initiated or pending
against the company for holding any Benami properly.
ii) The company did not have any transactions with companies struck off.
iii) The company does not have any charges or satisfaction which is yet to be registered with ROC beyond
the statutory period.
iv) The company has not traded or invested in crypto currency or virtual currency during the respective
financial years.
v) The company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including
foreign entities (intermediaries) with the understanding that the intermediary shall:
(a) Directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by
or on behalf of the company (ultimate beneficiaries) or
(b) Provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries
vi) The company has not received any fund from any person(s) or entity(ies), including foreign entities (funding
party) with the understanding (whether recorded in writing or otherwise) that the company shall:
(a) Directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by
or on behalf of the funding party (ultimate beneficiaries) or
(b) Provide any guarantee, security or the like on behalf of the ultimate beneficiaries,
vii) The company does not have any transaction which is not recorded in the books of accounts that has
been surrendered or disclosed as income during the year in the tax assessments under the Income Tax
Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961).
viii) The company has not been declared wilful defaulter by any bank or financial Institution or other lender.
ix) The company does not have any scheme of arrangements which have been approved by the competent
authority in terms of sections 230 to 237 of the Act.
x) The company do not have any subsidiary as at the balance sheet date, accordingly compliance with
number of layers prescribed under of the Companies Act read with Companies (Restriction on number of
layers) Rules, 2017 does not arise.
xi) The company has not revalued it's property, plant and equipment (including right to use assets) or intangible
assets or both during the current or previous year.
xii) The company has long term contracts as at March 31,2025 for which there were no material foreseeable
losses. The company did not have any long term derivative contract.
xiii) Ministry of Corporate Affairs (MCA) vide its notification number G.S.R. 206(E) dated March 24, 2021 (amended
from time to time) in reference to the proviso to Rule 3 (1) of the Companies (Accounts) Amendment
Rules, 2021, introduced the requirement, where a company used an accounting software, of only using
such accounting software w.e.f April 01, 2023 which has a feature of recording audit trail of each and
every transaction. The Company has assessed all of its IT applications including supporting applications
considering the guidance provided in "Implementation guide on reporting on audit trail under rule 11(g) of
the Companies (Audit and Auditors) Rules, 2014 (Revised 2024 edition)" issued by the Institute of Chartered
Accounts of India in February 2024, and identified applications that are relevant for maintaining books of
accounts. The Company has used accounting software for maintaining its books of account which has
a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all
relevant transactions recorded in the software.
xiv) Previous year's figures have been regrouped/reclassified wherever necessary to correspond with the
current period's classification/disclosure.
xv) The figures have been rounded off to the nearest lakhs of Rupees. The figure 0.00 wherever stated
represents amount below rounding off norms adopted by the company.
As per our report of even date attached
For Mukesh Raj & Co. For and on behalf of the Board of Directors
Chartered Accountants Hindustan Tin Works Limited
ICAI firm's registration number:016693N
Monika Goel Sanjay Bhatia Ashok Kumar Bhatia
Partner Managing Director Whole Time Director
ICAI Membership No.: 094072 DIN: 00080533 DIN: 00081730
Rajat Pathak M.K. Mittal
Place: New Delhi EVP (Finance) & EVP (Accounts) &
Date: 27th May, 2025 Company Secretary Chief Financial Officer
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