(o) Provisions, Contingent Liabilities and Contingent Assets
and Commitments :
Provisions are recognized when the Company has a present
obligation (Legal or constructive) as a result of a past event,
it is probable that the Company will be required to settle
the obligation, and a reliable estimate can be made of the
amount of the obligation.
The amount recognized as a provision is the best estimate
of the consideration required to settle the present obligation
at the end of the reporting period, taking into account the
risks and uncertainties surrounding the obligations. When
a provision is measured using the cash flow estimated to
settle the present obligation, its carrying amount is the
present obligations of those cash flows (when the effect of
the time value of money is material).
When some or all of the economic benefits required to settle
a provision are expected to be recovered from a third party,
a receivable is recognized as an asset if it is virtually certain
that reimbursement will be received and the amount of the
receivable can be measured reliably.
Contingent assets are not recognised in financial statements
since this may result in the recognition of income that may
never be realised. However, when the realisation of income
is virtually certain, then the related asset is not a contingent
asset and is recognised. A contingent asset is disclosed, in
financial statements, where an inflow of economic benefits
is probable.
(p) Financial Instruments:
Financial assets and financial liabilities are recognized when
a Company becomes a party to the contractual provisions of
the instruments.
Initial Recognition
Financial assets and financial liabilities are initially
measured at fair value (except Trade Receivable which is
at transaction price). Transaction costs that are directly
attributable to the acquisition or issue of financial assets and
financial liabilities (other than financial assets and financial
liabilities at fair value through profit or loss and ancillary
costs related to borrowings) are added to or deducted from
the fair value of the financial assets or financial liabilities, as
appropriate, on initial recognition. Transaction costs directly
attributable to the acquisition of financial assets or financial
liabilities at fair value through profit or loss are recognised
immediately in Statement of Profit and Loss.
Classification and Subsequent Measurement: Financial
Assets
The Company classifies financial assets as subsequently
measured at amortised cost, fair value through other
comprehensive income ("FVOCI") or fair value through profit
or loss ("FVTPL") on the basis of following:
(i) the entity's business model for managing the financial
assets and
(ii) the contractual cash flow characteristics of the
financial asset.
Amortised Cost
A financial asset shall be classified and measured at
amortised cost if both of the following conditions are met:
(i) the financial asset is held within a business model
whose objective is to hold financial assets in order to
collect contractual cash flows and
(ii) the contractual terms of the financial asset give rise on
specified dates to cash flows that are solely payments
of principal and interest on the principal amount
outstanding.
In case of financial asset classified and measured at
amortised cost, any interest income, foreign exchange gains/
losses and impairment are recognised in the Statement of
Profit and Loss.
Fair Value through OCI
A financial asset shall be classified and measured at fair
value through OCI if both of the following conditions are met:
(i) the financial asset is held within a business model
whose objective is achieved by both collecting
contractual cash flows and selling financial assets and
(ii) the contractual terms of the financial asset give rise on
specified dates to cash flows that are solely payments of
principal and interest on the principal amount outstanding.
Where the Company has elected to present the fair value
gain on equity instruments in other comprehensive income,
there is no subsequent classification of fair value gain
or losses to profit and loss account. Dividend from such
instruments is recognized in profit and loss account as other
income where right to receive is established.
Fair Value through Profit or Loss
A financial asset shall be classified and measured at
fair value through profit or loss unless it is measured at
amortised cost or at fair value through OCI. All recognised
financial assets are subsequently measured in their entirety
at either amortised cost or fair value, depending on the
classification of the financial assets. For financial assets at
fair value through profit or loss, net gain or losses, including
any interest or dividend income are recognised in the
Statement of Profit and Loss.
Classification and Subsequent Measurement: Financial
liabilities
Financial liabilities are classified as either financial liabilities
at FVTPL or 'other financial liabilities'.
Financial Liabilities at FVTPL
Financial liabilities are classified as at FVTPL when the
financial liability is held for trading or are designated upon
initial recognition as FVTPL. Gains or Losses on liabilities
held for trading are recognised in the Statement of Profit
and Loss.
Other Financial Liabilities
Other financial liabilities (including borrowings and trade and
other payables) are subsequently measured at amortised
cost using the effective interest method. Interest expense
(based on effective interest method), foreign exchange
gains and losses and any gain or loss on derecognition is
recognised in the Statement of Profit and Loss.
Impairment of financial assets
Financial assets, other than those at FVTPL, are assessed for
indicators of impairment at the end of each reporting period.
The Company recognises a loss allowance for expected
credit losses on financial asset. In case of trade receivables,
the Company follows the simplified approach permitted
by Ind AS 109 - Financial Instruments for recognition of
impairment loss allowance. The application of simplified
approach does not require the Company to track changes
in credit risk. The Company calculates the expected credit
losses on trade receivables using a provision matrix on the
basis of its historical credit loss experience.
Derecognition of financial assets
The Company derecognises a financial asset when the
contractual rights to the cash flows from the asset expire,
or when it transfers the financial asset and substantially all
the risks and rewards of the asset or if, the Company has
neither transferred nor retained substantially all risk and
reward of the asset, but has transferred control of the asset
to another party.
On derecognition of a financial asset, other than investments
classified as FVOCI, in its entirety, the difference between the
asset's carrying amount and the sum of the consideration
received and receivable and the cumulative gain or loss that
had been recognised in other comprehensive income and
accumulated in equity is recognised in profit or loss if such
gain or loss would have otherwise been recognised in profit
or loss on disposal of that financial asset.
On derecognition of equity investments classified as FVOCI,
accumulated gains or loss recognised in OCI is transferred
to retained earnings.
The Company derecognises a financial asset when the
contractual rights to the cash flows from the asset expire, or
when it transfers the financial asset and substantially all the
risks and rewards of ownership of the asset to another party.
If the Company neither transfers nor retains substantially all
the risks and rewards of ownership and continues to control
the transferred asset, the Company recognises its retained
interest in the asset and an associated liability for amounts
it may have to pay. If the Company retains substantially all
the risks and rewards of ownership of a transferred financial
asset, the Company continues to recognise the financial
asset and also recognises a collateralised borrowing for the
proceeds received.
On derecognition of a financial asset, other than investments
classified as FVOCI, in its entirety, the difference between the
asset's carrying amount and the sum of the consideration
received and receivable and the cumulative gain or loss that
had been recognised in other comprehensive income and
accumulated in equity is recognised in profit or loss if such
gain or loss would have otherwise been recognised in profit
or loss on disposal of that financial asset.
On derecognition of equity investments classified as FVOCI,
accumulated gains or loss recognised in OCI is transferred
to retained earnings.
Financial liabilities and equity instruments:
(i) Classification as debt or equity
Debt and equity instruments issued by the Company
are classified as either financial liabilities or as equity
in accordance with the substance of the contractual
arrangements and the definitions of a financial liability
and an equity instrument.
(ii) Equity instruments
An equity instrument is any contract that evidences
a residual interest in the assets of an entity after
deducting all of its liabilities. Equity instruments issued
by a Company are recognised at the proceeds received.
(q) Cash and cash equivalents :
Cash and cash equivalents in the Balance Sheet comprise
cash at bank, Cash in hand and short-term deposits with
banks that are readily convertible into cash which are
subject to insignificant risk of changes in value and are held
for the purpose of meeting short-term cash commitments.
(r) Derivative financial instruments :
The Company enters into derivative financial instruments
viz. foreign exchange forward contracts and cross
currency swaps to manage its exposure to interest rate,
foreign exchange rate risks and commodity prices. The
Company does not hold derivative financial instruments for
speculative purposes.
Derivatives are initially recognised at fair value at the date the
derivative contracts are entered into and are subsequently
remeasured to their fair value at the end of each reporting
period. The resulting gain or loss is recognised in profit or
loss immediately excluding derivatives designated as cash
flow hedge.
(s) Hedge accounting:
The Company designates certain hedging instruments
in respect of foreign currency risk and interest rate risk
price risk as cash flow hedges. At the inception of the
hedge relationship, the entity documents the relationship
between the hedging instrument and the hedged item,
along with its risk management objectives and its strategy
for undertaking various hedge transactions. Furthermore,
at the inception of the hedge and on an ongoing basis, the
Company documents whether the hedging instrument is
highly effective in offsetting changes in fair values or cash
flows of the hedged item attributable to the hedged risk.
The effective portion of changes in the fair value of the
designated portion of derivatives that qualify as cash flow
hedges is recognised in other comprehensive income and
accumulated under equity. The gain or loss relating to the
ineffective portion is recognised immediately in profit or loss.
Amounts previously recognised in other comprehensive
income and accumulated in equity relating to effective
portion as described above are reclassified to profit or loss
in the periods when the hedged item affects profit or loss, in
the same line as the recognised hedged item. However, when
the hedged forecast transaction results in the recognition of
a non-financial asset or a non-financial liability, such gains
and losses are transferred from equity and included in the
initial measurement of the cost of the non-financial asset or
non-financial liability.
Hedge accounting is discontinued prospectively when
the hedging instrument expires or is sold, terminated, or
exercised, or when it no longer qualifies for hedge accounting.
Any gain or loss recognised in other comprehensive income
and accumulated in equity at that time remains in equity and
is recognised when the forecast transaction is ultimately
recognised in profit or loss. When a forecast transaction is
no longer expected to occur, the gain or loss accumulated in
equity is recognised immediately in profit or loss.
(t) Cash Flow Statement:
Cash flows are reported using the indirect method, whereby
the net profit before tax is adjusted for the effects of
transactions of a non-cash nature, any deferrals or accruals
of past or future operating cash receipts or payments
and item of income or expenses associated with investing
or financing cash flows. The cash flows from operating,
investing and financing activities of the Company are
segregated.
(u) Segment Reporting:
Operating segments are defined as components of an
enterprise for which discrete financial information is
available that is evaluated regularly by the chief operating
decision maker, in deciding how to allocate resources and
assessing performance. The Companies chief operating
decision maker is the Managing Director.
3. Critical accounting judgements and key sources of
estimation uncertainty
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.
Key sources of estimation uncertainty
The key assumptions concerning the future and other key
sources of estimation uncertainty at the reporting date, that
have a significant risk of causing a material adjustment to
the carrying amounts of assets and liabilities within the
next financial year, are described below. The Company
based its assumptions and estimates on parameters
available when the financial statements were prepared.
Existing circumstances and assumptions about future
developments, however, may change due to market changes
or circumstances arising that are beyond the control of the
Company. Such changes are reflected in the assumptions
when they occur.
(i) Useful lives of property, plant and equipment :
The Company uses its technical expertise along with
historical and industry trends for determining the
economic life of an asset/component of an asset. The
useful lives are reviewed by management periodically
and revised, if appropriate. In case of a revision, the
unamortised depreciable amount is charged over the
remaining useful life of the assets.
(ii) Defined benefit obligation :
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.
(iii) 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 Discounted Cash Flow 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.
(iv) Income taxes :
Significant judgements are involved in estimating
budgeted profits for the purpose of paying advance tax,
determining the provision for income taxes, including
amount expected to be paid/recovered for uncertain
tax positions.
(v) Revenue from turnkey project :
The Company has recognised revenue and cost from
this project. Due to the nature of the project, recognition
of revenue and cost involves usage of percentage of
completion method which is determined based on
the progress towards complete satisfaction of that
performance obligation, which involves significant
judgments, identification of contractual obligations
and the Company's rights to receive payments for
performance completed till date.
(vi) Leases :
The Company considers all the extension-options
under the commercial contract for determining the
lease-term which forms the basis for the measurement
of right-of-use asset and the corresponding lease-
liability.
(vii) Discount, Incentives & Rebates :
Revenue is measured net of discounts, incentives,
rebates etc. given to the customers on the
Company's sales. The Company's presence across
different marketing regions within the country and
the competitive business environment makes the
assessment of various type of discounts, incentives
and rebates as complex and judgmental.
4. Recent 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.
31A Capital Management (Ind AS 1):
The Capital management objective of the Company is to:
i) maximise shareholder value and provide benefits to other stakeholders and,
ii) maintain an optimal capital structure to reduce the cost of capital.
The capital structure of the Company consists of issued capital, share premium and all other equity reserves attributable to
the equity holders. The Company's risk management committee reviews the capital structure of the company. The Company
monitors capital using debt-equity ratio, which is debt divided by equity.
31B Financial Risk Management Objectives (Ind AS 107)
The Company's principal financial liabilities, other than derivatives, comprises of borrowings, trade and other payables. The
main purpose of these financial liabilities is to finance the Company's operations. The Company's principal financial assets, other
than derivatives include trade and other receivables, investments and cash and cash equivalents that derive directly from its
operations.
The Company's activities expose it to market risk, liquidity risk and credit risk. The Company's overall risk management focuses
on the unpredictability of financial markets and seek to minimise potential adverse effects on the financial performance of the
Company. The company uses derivative financial instruments, such as foreign exchange forward contracts, cross currency swaps
that are entered to hedge foreign currency risk exposure and hedge interest rate exposure. Derivatives are used exclusively for
hedging purposes and not as trading or speculative instruments.
The Company has policies, procedures and authorisation matrix for utilisation of funds, which ensures deployment of fund in prudent
manner and the availability of funding through an adequate amount of credit facilities to meet obligation when due. The Company on
periodical basis reviews implementation and execution of above policies.
A. Market Risk
Market risk is the risk of loss of future earnings, fair values or future cash flows that may result from a change in the price
of a financial instrument. The value of a financial instrument may change as a result of changes in the interest rates, foreign
currency exchange rates, commodity prices, equity prices and other market changes that affect market risk sensitive instruments.
Market risk is attributable to all market risk sensitive financial instruments including investments and deposits, foreign currency
receivables, payables and borrowings.
1) Foreign Currency risk
Foreign currency risk is the risk of impact related to fair value or future cash flows of an exposure in foreign currency, which
fluctuate due to changes in foreign exchange rates. The Company's exposure to the risk of changes in foreign exchange rates
relates primarily to import of raw materials, capital expenditure and exports. When a derivative is entered for the purpose of being
a hedge, the Company negotiates the terms of those derivatives to match the terms of the hedged exposure.
The Company evaluates exchange rate exposure arising from foreign currency transactions. The Company follows established
risk management policies and procedures. It uses derivative instruments like foreign currency forwards and cross currency
swaps to hedge exposure to foreign currency risk.
2) Interest Rate Risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in
market interest rates. The Company's exposure to the risk of changes in market interest rates relates primarily to the Company's
term loans and short term borrowing with floating interest rate. For foreign currency loan with floating rate, the risk of variation
in interest rate is mitigated through cross currency swap. The Company constantly monitors the credit markets and rebalances
its financing strategies to achieve an optimal maturity profile and financing cost.
3) Commodity Price Risk
Commodity price risk for the Company is mainly related to fluctuations in raw material prices linked to various external factors,
which can affect the production cost of the Company. To manage this risk, the Company monitors factors affecting prices, identifies
new sources of supply of raw material, monitors inventory level, etc.
B. Credit Risk Management
Credit risk arises when a customer or counterparty does not meet its obligations under a financial instrument or customer contract,
leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and
from its financing / investing activities, including deposits with banks, foreign exchange transactions and financial guarantees.
The Company has no significant concentration of credit risk with any counterparty.
The management assessed that cash and bank balances, trade receivables, trade payables, cash credits and other financial assets and
Liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.
The following methods and assumptions were used to estimate the fair values:
(a) The fair values of the quoted investments are based on market price/net asset value at the reporting date.
(b) The fair value of unquoted investments is based on closing Net Assets Value.
(c) The fair value of forward foreign exchange contracts is calculated as the present value determined using forward exchange rates
and interest rate curve of the respective currencies.
(d) The fair value of the remaining financial instruments is determined using discounted cash flow analysis. The discount rates used
is based on management estimates.
33 Contingent Liability and Commitments not provided for in respect of :
The Company's pending litigations comprise of claims by or against the Company primarily by the workers/employees/
customers/suppliers etc., and proceedings pending with tax and other government authorities. The Company has reviewed its
pending litigations and proceedings and has adequately provided for where Provisions are required and disclosed the 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 results. In respect of litigations, where the management assessment of a financial
outflow is probable, the Company has made adequate provision in the financial statements and appropriate disclosure for
contingent liabilities is given below :
ii) Guarantees
Guarantees given by Banks on behalf of the Company upto Rs. 37.16 million (Rs. 32.22 million as on 31st March, 2024).
iii) Commitments
Estimated amount of Contracts remaining to be executed on Capital account and not provided for are Rs. 1,231.23* million (Rs.
2,064.68* million as on 31st March, 2024) and Other Commitments Rs. NIL (Rs. NIL as on 31st March, 2024)
*The Company had entered into an asset purchase agreement with Klaus Waren Fixtures Private Limited and its promoter for the
purchase of 'Aquel' brand alongwith other assets in two tranches. The above figure includes Rs. 430 million towards the second
tranche of the acquisition, subject to the completion of the conditions precedent to the second tranche of the acquisition including
but not limited to obtaining consents from governmental authorities.
iv) The Hon'ble Supreme Court of India ("SC") by their order dated February 28, 2019, in the case of Surya Roshani Limited & others
v/s EPFO, set out the principles based on which allowances paid to the employees should be identified for inclusion in basic
wages for the purposes of computation of Provident Fund contribution. Pending directions or clarification from the EPFO, the
quantification of impact, if any, is not ascertainable and consequently no effect has been given in the accounts.
34 Employee Benefits
The disclosures required under IND AS 19 " Employee Benefits" are given below :
A Defined Contribution Plans:
Amount recognized as an expense and included in Note 28 under the head "Contribution to Provident and other Funds" of
Statement of Profit and Loss Rs. 116.71 million (Rs. 76.31 million for the year ended 31st March, 2024).
B Defined Benefit Plans:
Gratuity:
The Company operates a defined benefit 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 Gratuity scheme of the Company is funded for certain employees and non funded for
the remaining employees.
Compensated Absences :
The Company allows privilege leave and sick leave to its employees. Privilege leave and sick leave are accumulated and can
be availed during the period of employment or encashed in case of privilege leave at the time of resignation, retirement or
termination of employment.
The identification of suppliers as micro, small and medium enterprise defined under " The Micro, Small and Medium Enterprises
Development Act, 2006" was done on the basis of information to the extent provided by the suppliers of the Company and has
been relied upon by the auditors.
41 Revenue (IND AS 115)
a. Revenue from manufacturing and trading activities
The Company is primarily engaged in manufacturing and selling of pipes and Fittings and allied products in India. It comprises
of Pipes and Fittings, Bathware Sanitary and Faucet and allied products. All sales are made at a point in time and revenue
from contract with customer are recognised when goods are dispatched and the control over the goods sold are transferred
to customers. The Company does not expect to have any contracts where the period between the transfer of goods and
payment by customer exceeds one year. Hence, the Company does not adjust revenue for the time value of money.
In compliance with Ind AS 115, discounts and incentives provided to customers are now treated as variable components of
consideration and have been recognised as revenue deductions instead of other expenses. Such discount were recognized
as deduction from revenue in previous period also.
43.1 : Nature of CSR Activities - Improving plumbing expertise to strengthen essential healthcare services. Expanding access
to safe drinking water while enhancing groundwater recharge efforts. Supporting farmers by constructing water structures or
providing training, ensuring sustainable agricultural practices. Elevating community well-being with continued investments—
building toilets in schools, offering scholarships, and facilitating market linkages for women-led enterprises through training.
43.2 : It includes Rs. 15.00 million (Rs. NIL as on 31st March, 2024) of Corporate Social Responsibility unspent expense related to
ongoing projects as at 31st March, 2025. The same was transferred to a special designated account before the end of the financial
year.
43.3 : Surplus of previous years is utilised against shortfall for the year.
44 The Board of Directors of the Company at its meeting held on 21.05.2025 have recommended a final dividend of Rs 0.50 per share
of face value of Rs 10/- each for the year ended 31.03.2025 which is subject to shareholders approval in ensuing annual general
meeting.
45 The Company does not have any benami property held in its name. No proceedings have been initiated on or are pending against
the Company for holding benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and Rules made
thereunder.
46 Details of Crypto currency or Virtual currency
The Company is not engaged in the business of trading or investing in crypto currency or virtual currency and hence no disclosure
is required.
47 Compliance with number of layers of companies
The Company does not have any subsidiary company accordingly compliance 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 does not arise.
48 Utilisation of borrowed funds
The Company has not advanced any funds or loaned or invested by the Company to or in any other person(s) or entities, including
foreign entities ("Intermediaries"), with the understanding that the intermediary shall whether directly or indirectly lend or invest
in other persons or entities identified in any manner by or on behalf of the Company (Ultimate Beneficiaries) or provide any
guarantee, security or the like on behalf of ultimate beneficiaries.
The Company has not received any funds from any person(s) or entities including foreign entities ("Funding Parties") with the
understanding that such Company shall whether, 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 provide guarantee, security or the like on
behalf of the Ultimate beneficiaries.
49 Relationship with struck off companies
The Company does not have any transaction with companies struck off under section 248 of Companies Act, 2013 or section 560
of Companies Act, 1956 and hence no disclosure is required.
50 Compliance with approved Scheme(s) of Arrangements
The Company has not entered into any scheme of arrangements in terms of sections 230 to 237 of the Companies Act, 2013.
51 Wilful defaulter
As on 31st March, 2025 the Company has not been declared wilful defaulter by any bank/financial institution or other lender.
52 The Company has used accounting software (i.e. ERP ) for maintaining its books of account, which have a feature of recording
audit trait (edit Log) facility and the same has operated throughout the year for all transactions recorded in the software including
critical fields of non-transactional activities at data base Level for which a feature of recording audit trail (edit Log) facility was
enabled during the year.
Further, the audit trail has been preserved by the Company as per the statutory requirements for record retention and in case of
non-transactional activities at database level for which a feature of recording audit trail (edit log) was enabled during the current
year.
For N. A. Shah Associates LLP Jayant S. Chheda Parag J. Chheda
Chartered Accountants Managing Director Director
Firm Registration Number: 116560W/W100149 (DIN No : 00013206) (DIN No : 00013222)
Milan Mody Anand Gupta Shailesh Bhaskar
Partner Chief Financial Officer Company Secretary
Membership No. 103286
Place: Mumbai Place: Mumbai
Date: 21.05.2025 Date: 21.05.2025
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