Notes to Accounts of National Fittings Ltd.

Mar 31, 2025

m) Provisions, Contingent Liabilities and Contingent Assets

A provision is recognised when the Company has a present obligation as a result of past events 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 (excluding retirement benefits) are not discounted to
their present value and are determined based on the 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 disclosed in the Notes. Contingent assets are
neither recognised or disclosed in the financial statements.

n) Dividend Distribution

Dividends paid (including income tax thereon) are 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 shareholders.”

o) Earnings per share

Basic and diluted earning per share is computed by dividing the profit / (loss) after tax (including the post
tax effect of extraordinary items, if any) by the weighted average number of equity shares outstanding
during the year.

p) Segment reporting

The Company identifies primary segments based on the dominant source, nature of risks and returns
and the internal organisation and management structure. The operating segments are the segments
for which separate financial information is available and for which operating profit/loss amounts are
evaluated regularly by the Executive Management in deciding how to allocate resources and in assessing
performance.

The accounting policies adopted for segment reporting are in line with the accounting policies of the
Company. Segment revenue, segment expenses, segment assets and segment liabilities have been
identified to segments on the basis of their relationship to the operating activities of the segment.

Inter-segment revenue is accounted on the basis of transactions which are primarily determined based
on market / fair value factors.

Revenue, expenses, assets and liabilities which relate to the Company as a whole and are not allocable
to segments on reasonable basis have been included under “unallocated revenue / expenses / assets /
liabilities”.

q) Cost recognition

Cost and expenses are recognised when incurred and have been classified according to their nature.
The borrowing cost represents interest payable on loans taken for carrying out business operations and
the same is charged to revenue.

Financial assets and financial liabilities are recognised 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. 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:

the entity''s business model for managing the financial assets and
the contractual cash flow characteristics of the financial asset.

(i) Amortised Cost

A financial asset shall be classified and measured at amortised cost if both of the following conditions
are met:

- the financial asset is held within a business model whose objective is to hold financial assets 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 of principal and interest on the principal amount outstanding.

(ii) Fair Value through other comprehensive income

A financial asset shall be classified and measured at fair value through OCI if both of the following
conditions are met:

- the financial asset 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 of principal and interest on the principal amount outstanding.

(iii) 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.

Financial liabilities are classified as either financial liabilities at FVTPL or ''other financial liabilities''.

(i) 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.

(ii) Other Financial Liabilities:

Other financial liabilities (including borrowings and trade and other payables) are subsequently
measured at amortised cost using the effective interest method.

The effective interest method is a method of calculating the amortised cost of a financial liability and of
allocating interest expense over the relevant period. The effective interest rate is the rate that exactly
discounts estimated future cash payments (including all fees and points paid or received that form an
integral part of the effective interest rate, transaction costs and other premiums or discounts) through the
expected life of the financial liability, or (where appropriate) a shorter period, to the net carrying amount
on initial recognition.

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 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 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.

Derecognition of financial liabilities

A financial liability is derecognized when the obligation under the liability is discharged or cancelled or
expires. When an existing financial liability is replaced by another from the same lender on substantially

different terms, or the terms of an existing liability are substantially modified, such an exchange or
modification is treated as the derecognition of the original liability and the recognition of a new liability.
The difference in the respective carrying amounts is recognized in the statement of profit or loss.

Equity investment in subsidiaries, joint ventures and associates

Investment in subsidiaries, joint ventures and associates are carried at cost. Impairment recognized, if
any, is reduced from the carrying value.

Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if
there is a currently enforceable legal right to offset the recognised amounts and there is an intention to
settle on a net basis, to realise the assets and settle the liabilities simultaneously.

Derivative financial instruments

Derivative financial instruments are initially recognised at fair value on the date on which a derivative
contract is entered into and are subsequently re-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.

1.3 Use of estimates

The preparation of financial statements requires the management of the Company to make estimates
and assumptions that affect the reported balances of assets and liabilities and disclosures relating to
the contingent liabilities as at the date of the financial statements and reported amounts of income and
expense during the year. Future results could differ due to changes in these estimates and the difference
between the actual result and the estimates are recognised in the period in which the results are known
/ materialise.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting
estimates are recognised 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.

1.4 Significant estimates and judgements

The areas involving critical estimates or judgements are:

i) Estimation of useful life of Property, Plant and Equipment - Refer Note 2(e)

ii) Defined benefit obligation - Refer Note 2.25

iii) Estimation and evaluation of provisions and contingencies relating to tax litigations - Refer
Note 2.24

1.5 Recent Indian Accounting Standard (Ind AS) pronouncements which are not yet effective

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 notified Ind AS - 117 Insurance Contracts and amendments
to Ind AS 116 - Leases, relating to sale and leaseback transactions, applicable to the Company w.e.f.
April 1, 2024. The Company has reviewed the new pronouncements and based on its evaluation has
determined that it does not have any impact in its financial statements.

2.26 Employee benefit plans

a Defined contribution plans

The Company makes Provident Fund and Superannuation Fund contributions to defined contribution
plans for qualifying employees. Under the Schemes, the Company is required to contribute a specified
percentage of the payroll costs to fund the benefits. The Company recognised Rs.13.06 Lakhs (year
ended 31 March, 2024 Rs.17.88 Lakhs) towards Provident Fund contribution and Rs.12.56 Lakhs
(Year ended 31 March, 2024 Rs.16.71 Lakhs) towards Employees State Insurance contribution in the
Statement of Profit and Loss. The contributions payable are at the rates specified in the rules of the
schemes.

- the fair value of the remaining financial instruments is determined using discounted cash flow
analysis

The fair value of unquoted equity instruments and unquoted bonds is not significantly different from their
carrying value and hence the management has considered their carrying amount as fair value.

iv. Valuation processes

The finance department of the company includes a team that performs the valuations of financial assets
and liabilities required for financial reporting purposes, including level 3 fair values. This team reports
directly to the chief financial officer (CFO) and the audit committee (AC). Discussions of valuation
processes and results are held between the CFO, AC and the valuation team at least once every three
months, in line with the company''s quarterly reporting periods.

2.28 FINANCIAL RISK MANAGEMENT OBJECTIVES

The Company''s activity exposes itself to variety of financial risk which includes market risk, credit risk,
liquidity risk, interest rate risk and price risk. The Company monitors and manages the above financial
risks relating to the operations of the group through internal risk reports which analyses exposures
by degree and magnitude of risks. The primary focus is to identify risks and take steps for mitigation
of risk or to minimise the potential adverse effects on the financial performance of the Company. The
Company does not enter into any derivative financial instruments to hedge risk exposures.

A) Foreign Currency Risk

The Company undertakes transactions denominated in foreign currencies and consequently
has exposure to exchange rate fluctuations. The company operates internationally and a major
portion of the international sales transaction are in USD, purchases from overseas suppliers are
in USD.

The Company evaluates exchange rate exposure arising from foreign currency transactions and
follows established risk management policies and standard operating procedures to mitigate the
risks

These exchange rate exposures are not hedged by the Company. The carrying amounts of the
Company''s foreign currency denominated monetary assets and monetary liabilities at the end of
the reporting period are as follows:-

C) Market risk

Market risk is the risk of any loss in future earnings, in realisable fair values or in future cash flows
that may result from a change in the price of a financial instrument. The value of a financial instrument
may change as a result of changes in the interest rates, foreign currency exchange rates, equity
price fluctuations, liquidity and other market changes. Future specific market movements cannot be
normally predicted with reasonable accuracy.

D) Liquidity risk

Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of
liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use
as per requirements. The company''s principal source of liquidity is from cash and cash equivalent and
working Capital borrowings. The company believes that the working capital through internal accruals
is sufficient to meet its current requirements and hence the Company does not perceive any such risk.

F) Credit risk

Credit risk arises from the risk of default on its obligation by the counterparty resulting in financial loss,
such as cash and cash equivalents and outstanding receivables.

Credit risk on cash and cash equivalents is considered negligible as the company generally invests in
fixed deposits with reputable banks. They are not impaired or past due for each of the reporting dates.

Credit risk on outstanding receivables is the exposure to billed receivable and are normally unsecured
and derived from revenue earned from customer mostly from Outside India. Credit risk is managed
by the company through credit approvals and continuously monitoring the credit worthiness of the
customer to which the company grants credit in the normal course of business. Trade receivables
consist of a large number of customers, spread across diverse industries and geographical areas. The
Company does not have any significant credit risk exposure to any single counterparty.

The concentration of credit risk is limited due to the fact that the customer base is large and unrelated.

2.29 CAPITAL MANAGEMENT

For the purpose of the company''s capital management, capital includes issued equity capital, share
premium and all other equity reserves attributable to the equity holders of the Company. The primary
objective of the Company''s capital management is to maximise the shareholder value.

The Company maintain or adjust the capital structure by dividend payment to shareholders, return
capital to shareholders or issue new shares. The company monitors capital using a gearing ratio,
which is net debt divided by total capital plus net debt. The Company includes within debt, interest
bearing loans and borrowings, trade and other payables, less cash and cash equivalents.

2.30 SEGMENT REPORTING

The Company has only one reportable business segment as it deals only in Manufacturing of Pipe
Fittings in terms of Ind AS 108 “Operating Segment”. All the assets of the Company are located in
India. The Company monitors the operating results as one single segment for the purpose of making
decisions about resource allocation and performance assessment. Accordingly, there are no separate
reportable segments as per IND-AS 108, “Operating Segment” prescribed under Section 133 of
the Companies Act, 2013 read with the Companies (Indian Accounting Standards) Rules, 2015, as
amended.

2.35 Trade Receivables

The Trade Receivables includes Rs.6.58 lakhs outstanding for more than two years from a party and
company has filed case before District Court, Coimbatore against those defaulted party and outcome
of case is pending and therefore no provision is made during the year.

2.36 OTHER STATUTORY INFORMATION FOR THE YEAR ENDED 31 MARCH 2025 AND 31 MARCH
2024.

(i) The Company do not have any benami property, where any 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 does not have any transaction with companies struck off under Section 248 of the
Companies Act, 2013 or section 560 of the Companies Act, 1956 for the year ended.

(iii) The Company does not have any charge or satisfaction which is yet to be registered with
Registrar of Companies beyond the statutory period.

(iv) The Company have not traded or invested in Crypto currency or Virtual Currency during the
financial year.

(v) The Company have 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 have 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 do not have any such transaction which is not recorded in the books of accounts
that has been surrendered or disclosed as income 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)

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Mar 31, 2024

m) Provisions, Contingent Liabilities and Contingent Assets

A provision is recognised when the Company has a present obligation as a result of past events 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 (excluding retirement benefits) are not discounted to their present value and are determined based on the 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 disclosed in the Notes. Contingent assets are neither recognised or disclosed in the financial statements.

n) Dividend Distribution

“Dividends paid (including income tax thereon) are 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 shareholders.

o) Earnings per share

Basic and diluted earning per share is computed by dividing the profit / (loss) after tax (including the post tax effect of extraordinary items, if any) by the weighted average number of equity shares outstanding during the year.

p) Segment reporting

The Company identifies primary segments based on the dominant source, nature of risks and returns and the internal organisation and management structure. The operating segments are the segments for which separate financial information is available and for which operating profit/loss amounts are evaluated regularly by the Executive Management in deciding how to allocate resources and in assessing performance.

The accounting policies adopted for segment reporting are in line with the accounting policies of the Company. Segment revenue, segment expenses, segment assets and segment liabilities have been identified to segments on the basis of their relationship to the operating activities of the segment.

Inter-segment revenue is accounted on the basis of transactions which are primarily determined based on market / fair value factors.

Revenue, expenses, assets and liabilities which relate to the Company as a whole and are not allocable to segments on reasonable basis have been included under “unallocated revenue / expenses / assets / liabilities”.

q) Cost recognition

Cost and expenses are recognised when incurred and have been classified according to their nature. The borrowing cost represents interest payable on loans taken for carrying out business operations and the same is charged to revenue.

r) Financial instruments, Financial Assets, Financial Liabilities

Financial assets and financial liabilities are recognised 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. 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.

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:

the entity''s business model for managing the financial assets and the contractual cash flow characteristics of the financial asset.

(i) Amortised Cost

A financial asset shall be classified and measured at amortised cost if both of the following conditions are met:

- the financial asset is held within a business model whose objective is to hold financial assets 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 of principal and interest on the principal amount outstanding.

(ii) Fair Value through other comprehensive income

A financial asset shall be classified and measured at fair value through OCI if both of the following conditions are met:

- the financial asset 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 of principal and interest on the principal amount outstanding.

(iii) 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.

Classification and Subsequent Measurement: Financial liabilities

Financial liabilities are classified as either financial liabilities at FVTPL or ''other financial liabilities''.

(i) 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.

(ii) Other Financial Liabilities:

Other financial liabilities (including borrowings and trade and other payables) are subsequently measured at amortised cost using the effective interest method.

The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial liability, or (where appropriate) a shorter period, to the net carrying amount on initial recognition.

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 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 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.

Derecognition of financial liabilities

A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognized in the statement of profit or loss.

Equity investment in subsidiaries, joint ventures and associates

Investment in subsidiaries, joint ventures and associates are carried at cost. Impairment recognized, if any, is reduced from the carrying value.

Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.

Derivative financial instruments

Derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered into and are subsequently re-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.

1.3 Use of estimates

The preparation of financial statements requires the management of the Company to make estimates and assumptions that affect the reported balances of assets and liabilities and disclosures relating to the contingent liabilities as at the date of the financial statements and reported amounts of income and expense during the year. Future results could differ due to changes in these estimates and the difference between the actual result and the estimates are recognised in the period in which the results are known / materialise.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised 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.

1.4 Significant estimates and judgements

The areas involving critical estimates or judgements are:

i) Estimation of useful life of Property, Plant and Equipment - Refer Note 2(e)

ii) Defined benefit obligation - Refer Note 2.25

iii) Estimation and evaluation of provisions and contingencies relating to tax litigations - Refer Note 2.24

1.5 Recent Indian Accounting Standard (Ind AS) pronouncements which are not yet effective

On March 31, 2023, the Ministry of Corporate Affairs (MCA) through notification, notified the amendments to existing standards which are effective for annual periods beginning after 1st April 2023. Key amendments relating to the same where financial statements are required to comply are:

Amendments to Ind AS 12 Income Taxes — Deferred Tax related to Assets and Liabilities arising from a Single Transaction:

Under the amendments, an entity does not apply the initial recognition exemption for transactions that give rise to equal taxable and deductible temporary differences. Equal taxable and deductible temporary differences may arise on initial recognition of an asset and liability in a transaction that is not a business combination and affects neither accounting nor taxable profit. For example, this may arise upon recognition of a lease liability and the corresponding right-of-use asset applying Ind AS 116 Leases at the commencement date of a lease. The amendments should be applied to transactions that occur on or after the beginning of the earliest comparative period presented. In addition, at the beginning of the earliest comparative period presented, a deferred tax asset (provided that sufficient taxable profit is available) and a deferred tax liability should also be recognised for all deductible and taxable temporary differences associated with leases and decommissioning obligation

Amendments to Ind AS 1 Presentation of Financial Statements - Disclosure of Accounting Policies:

The amendments replace all instances of the term ''significant accounting policies'' with ''material accounting policy information''. Accounting policy information is material if, when considered together with other information included in an entity''s financial statements, it can reasonably be expected to influence decisions that the primary users of general-purpose financial statements make on the basis of those financial statements. The supporting paragraph in Ind AS 1 are also amended to clarify that accounting policy information that relates to immaterial transactions, other events or conditions is immaterial and need not be disclosed. Accounting policy information may be material because of the nature of the related transactions, other events or conditions, even if the amounts are immaterial. However, not all accounting policy information relating to material transactions, other events or conditions is itself material.

Amendments to Ind AS 8 Accounting Policies, Changes in Accounting Estimates and Errors — Definition of Accounting Estimates:

The amendments replace the definition of a change in accounting estimates with a definition of accounting estimates. Under the new definition, accounting estimates are “monetary amounts in financial statements that are subject to measurement uncertainty”. The amendments clarify the distinction between changes in accounting estimates and changes in accounting policies and the correction of errors. Also, they clarify how entities use measurement techniques and inputs to develop accounting estimates.

These amendments are not expected to have a significant impact on the Company''s Standalone Financial Statements. This assessment is based on currently available information and may be subject to changes arising from further reasonable and supportable information being made available to the company when it will adopt the respective standards.

Note: Figures / percentages in brackets relates to the previous year.

2.26 Employee benefit plans

a Defined contribution plans

The Company makes Provident Fund and Superannuation Fund contributions to defined contribution plans for qualifying employees. Under the Schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company recognised Rs.17.88 Lakhs (year ended 31 March, 2023 Rs.19.62 Lakhs) towards Provident Fund contribution and Rs.16.71 Lakhs (Year ended 31 March, 2023 Rs.16.54 Lakhs) towards Employees State Insurance contribution in the Statement of Profit and Loss. The contributions payable are at the rates specified in the rules of the schemes.

b Defined benefit plans

The Company offers the following employee benefit schemes to its employees:

i. Gratuity

ii. Leave Encashment

The management assessed that the fair value of cash and cash equivalent, trade receivables, trade payables, and other current financial assets and liabilities approximate their carrying amounts largely due to the short term maturities of these instruments

The fair values of non current borrowings are based on discounted cash flows using a current borrowing rate. They are classified as level 3 fair values in the fair value hierarchy due to the use of unobservable inputs, including own credit risk

ii. Fair Value Hierarchy

This section explains the judgements and estimates made in determining the fair values of the financial instruments that are recognised and measure at fair value. To provide an indication about the reliability of the inputs used in determining fair value, the company has classified its financial instruments into three levels prescribed under the accounting standard. An explanation of each level follows underneath the table:

There have been no transfers among Level 1, Level 2 and Level 3 during the period

Level 1 - Level 1 hierarchy includes financial instruments measured using quoted prices. This includes listed equity instruments, mutual funds that have quoted price. The fair value of all equity instruments which are traded in the stock exchanges is valued using the closing price as at the reporting period. The mutual funds are valued using the closing NAV.

Level 2 - The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

Level 3 - If one or more of the significant inputs are not based on observable market data, the instrument is included in level 3.

iii. Valuation technique used to determine fair value

Specific Valuation techniques used to value financial instruments include:

- the use of quoted market prices or dealer quotes for similar instruments

- the fair value of the remaining financial instruments is determined using discounted cash flow analysis

The fair value of unquoted equity instruments and unquoted bonds is not significantly different from their carrying value and hence the management has considered their carrying amount as fair value.

iv. Valuation processes

The finance department of the company includes a team that performs the valuations of financial assets and liabilities required for financial reporting purposes, including level 3 fair values. This team reports directly to the chief financial officer (CFO) and the audit committee (AC). Discussions of valuation processes and results are held between the CFO, AC and the valuation team at least once every three months, in line with the company''s quarterly reporting periods.

2.28 FINANCIAL RISK MANAGEMENT OBJECTIVES

The Company''s activity exposes itself to variety of financial risk which includes market risk, credit risk, liquidity risk, interest rate risk and price risk. The Company monitors and manages the above financial risks relating to the operations of the group through internal risk reports which analyses exposures by degree and magnitude of risks. The primary focus is to identify risks and take steps for mitigation of risk or to minimise the potential adverse effects on the financial performance of the Company. The Company does not enter into any derivative financial instruments to hedge risk exposures.

A) Foreign Currency Risk

The Company undertakes transactions denominated in foreign currencies and consequently has exposure to exchange rate fluctuations. The company operates internationally and a major portion of the international sales transaction are in USD, purchases from overseas suppliers are in USD.

The Company evaluates exchange rate exposure arising from foreign currency transactions and follows established risk management policies and standard operating procedures to mitigate the risks.

These exchange rate exposures are not hedged by the Company. The carrying amounts of the Company''s foreign currency denominated monetary assets and monetary liabilities at the end of the reporting period are as follows:-

C) Market risk

Market risk is the risk of any loss in future earnings, in realisable fair values or in future cash flows that may result from a change in the price of a financial instrument. The value of a financial instrument may change as a result of changes in the interest rates, foreign currency exchange rates, equity price fluctuations, liquidity and other market changes. Future specific market movements cannot be normally predicted with reasonable accuracy.

D) Liquidity risk

Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements. The company''s principal source of liquidity is from cash and cash equivalent and working Capital borrowings. The company believes that the working capital through internal accruals is sufficient to meet its current requirements and hence the Company does not perceive any such risk.

F) Credit risk

Credit risk arises from the risk of default on its obligation by the counterparty resulting in financial loss, such as cash and cash equivalents and outstanding receivables.

Credit risk on cash and cash equivalents is considered negligible as the company generally invests in fixed deposits with reputable banks. They are not impaired or past due for each of the reporting dates.

Credit risk on outstanding receivables is the exposure to billed receivable and are normally unsecured and derived from revenue earned from customer mostly from Outside India. Credit risk is managed by the company through credit approvals and continuously monitoring the credit worthiness of the customer to which the company grants credit in the normal course of business. Trade receivables consist of a large number of customers, spread across diverse industries and geographical areas. The Company does not have any significant credit risk exposure to any single counterparty.

2.29 CAPITAL MANAGEMENT

For the purpose of the company''s capital management, capital includes issued equity capital, share premium and all other equity reserves attributable to the equity holders of the Company. The primary objective of the Company''s capital management is to maximise the shareholder value.

The Company maintain or adjust the capital structure by dividend payment to shareholders, return capital to shareholders or issue new shares. The company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Company includes within debt, interest bearing loans and borrowings, trade and other payables, less cash and cash equivalents.

2.30 SEGMENT REPORTING

The Company has only one reportable business segment as it deals only in Manufacturing of Pipe Fittings in terms of Ind AS 108 “Operating Segment”. All the assets of the Company are located in India. The Company monitors the operating results as one single segment for the purpose of making decisions about resource allocation and performance assessment. Accordingly, there are no separate reportable segments as per IND-AS 108, “Operating Segment” prescribed under Section 133 of the Companies Act, 2013 read with the Companies (Indian Accounting Standards) Rules, 2015, as amended.

2.35 Trade Receivables

The Trade Receivables includes Rs.6.58 lakhs outstanding for more than two years from a party and company has filed case before District Court, Coimbatore against those defaulted party and outcome of case is pending and therefore no provision is made during the year.

2.36 OTHER STATUTORY INFORMATION FOR THE YEAR ENDED 31 MARCH 2024 AND 31 MARCH 2023.

(i) The Company do not have any benami property, where any 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 does not have any transaction with companies struck off under Section 248 of the Companies Act, 2013 or section 560 of the Companies Act, 1956 for the year ended.

(iii) The Company does not have any charge or satisfaction which is yet to be registered with Registrar of Companies beyond the statutory period.

(iv) The Company have not traded or invested in Crypto currency or Virtual Currency during the financial year.

(v) The Company have 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 have 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 do not have any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income 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 Government or any Government authority or other lender, in accordance with the guidelines on wilful defaulters issued by the Reserve Bank of India

(ix) The Board of Directors of the company had approved the disposal of assets of Thekkalur operation. The transaction was consummated and the consideration was received by the Company during the period April 2024 after the receipt of shareholders'' approval and successful completion of due-diligence process. The Thekkalur operation is only a foundry unit and is not a separate major line of business or geographical area and also not a cash generating unit as defined in Ind AS 105 - “Non-current Assets held for Sale and Discontinued Operations”

The Board is of the opinion that the disposal of the Thekkalur operation will result in substantial savings in cost of production and administrative expenses. The outcome from the sale will give us resource for a modernised consolidated operation and sufficient additional funding for activities aimed at business expansion”. The Board does not expect any disruption to current revenues on account of sale of unit, since the company has sufficient manufacturing capacity for production and also has made alternative arrangement for procurement of products.

2.37. The figures for the corresponding previous year have been regrouped / reclassified, wherever considered necessary including requirements of the amended Schedule III to the Companies Act, 2013, to make them comparable with current year classification.

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Mar 31, 2018

1 Corporate Information

National Fittings Limited (referred to as “the Company”) manufacture and sells SG Iron Grooved and Screwed Pipe Fittings, Stainless Pipe Fittings and Ball Valves for industrial and non-industrial applications.

The Company is a Public limited company incorporated and domiciled in India.

(i) Terms / rights attached to shares

(a) The company has only one class of equity shares having at par value of Rs.10/- per share. Each holder of equity shares is entitled to one vote per share. The company declares and pays dividend in Indian rupees. No dividend has been proposed by the Board of Directors for the year.

(b) In the event of liquidation of the company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be proportion to the number of equity shares held by the shareholders.

The company has only one class of Preference shares having at par value of Rs.100/- per share which is non-convertible and non-cumulative. The preference shares are entitled to a dividend of 9% and will be redeemable at par subject to the provision of the Companies Act, 2013 after the expiry of the sixth year but before the expiry of the twelfth year from the date of allotment of the shares by one or more installments at the option of the company by giving 3 month’s notice.

b) The above credit facilities availed by the company are primarily secured by mortgage of Plant and Machinery and collaterally secured on charge of property situated at SF No.426/2A1,2A2, 426/2B, 2C, Door No. 20/027, Gandhi Nagar, Vadugapalayam Road, Thekkalur Village, Avinashi Taluk, Tiruppur- 641603.

c) There are no defaults in the repayment of loan and interest during the year.

(a) The above credit facilities availed by the company are primarily secured by Hypothecation by way of First and exclusive charges on all Stocks and Book Debts. and collaterally secured on charge of property situated at SF No.426/2A1,2A2, 426/2B, 2C, Door No. 20/027, Gandhi Nagar, Vadugapalayam Road, Thekkalur Village, Avinashi Taluk, Tiruppur - 641603.

From BANK OF INDIA:

# Working capital loans comprising of cash credit Export Packing Credit and other non fund based limits are secured by hypothecation of stocks and book debts and collaterally secured by Hypothecation of Machinery and equitable mortgage of property situate at Kaniyur Village.

Further the above are guaranteed personally by the Managing Director and a relative of the Managing Director of the company. During the year the company has not defaulted in repayment of loan and interest.

@ Demand Loan availed is secured by lien on Fixed Deposits with Bank of India.

(ii) Disclosures required under Section 22 of the Micro, Small and Medium Enterprises Development Act, 2006

As per the information available with the company till date, none of the suppliers have informed the company about their having registered themselves under the “Micro, Small and Medium enterprises development Act, 2006. As such information required under the Act can not be complied and therefore not disclosed for the year.

Dues to Micro and Small Enterprises have been determined to the extent such parties have been identified on the basis of information collected by the Management. This has been relied upon by the auditors.

Note: Figures / percentages in brackets relates to the previous year.

2.1 Employee benefit plans

2.1 a Defined contribution plans

The Company makes Provident Fund and Superannuation Fund contributions to defined contribution plans for qualifying employees. Under the Schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company recognised Rs. 19,88,631 (Year ended 31 March, 2017 Rs.9,75,811) towards Provident Fund contribution and Rs.19,55,850 (Year ended 31 March, 2017 Rs.8,93,271) towards Employees State Insurance contribution in the Statement of Profit and Loss. The contributions payable are at the rates specified in the rules of the schemes.

2.1 b Defined benefit plans

The Company offers the following employee benefit schemes to its employees:

i. Gratuity

ii. Leave Encashment

The following table sets out the funded status of the defined benefit schemes and the amount recognised in the financial statements:

In accordance with Accounting Standard 22, the deferred tax Asset of ‘ 50.28 lacs for the year have been recognised in Profit and Loss Statement.

2.2 Note on Scheme of Amalgamation:

The scheme of amalgamation under the Companies Act between Interfit India Limited (“IIL”) and Merit Industries Limited (“MIL”) with the Company has been approved by the NCLT, Chennai vide their order dated March 25, 2019 with April 1, 2017 as the appointed date. Upon necessary filing with the Registrar of Companies (ROC) on 29.03.2019, the scheme has become effective and the effect thereof has been given in these accounts. Consequently, in respect of the merger of Interfit India Limited (“IIL”) and Merit Industries Limited (“MIL”) with the Company -

a. In terms of the Scheme, the entire business and the whole of the undertaking of IIL and MIL, as a going concern stands transferred to and vested in the Company with effect from April 1, 2017, being the Appointed Date.

b. I n terms of the Scheme, 46,97,010 equity shares of the company held by IIL shall cancelled automatically and Equity Shares of MIL is held by the company shall also stand cancelled.

c In consideration of the amalgamation of IIL with the Company, the Company proposes to issue 54,60,192 equity shares of Rs 10/- each aggregating to Rs. 5,46,01,920/- in the ratio of 3 (three) fully paid up Equity shares of the face value of Rs 10/- each of the Company for every 2 (two) fully paid up equity shares of Rs 10/- each held in IIL. The additional Equity share issued pursuant to the scheme by the company to IIL has been adjusted in capital reserves of the company as per the Accounting Standard (AS) -14 read with IND AS 103- Accounting for Business Combinations.

d. Accounting for Amalgamation:

The amalgamation of IIL and MIL with the Company is accounted for on the basis of the Pooling of Interest Method as envisaged in the Accounting Standard (AS) -14 read with IND AS 103-Accounting for Business Combinations issued by the Institute of Chartered Accountants of India.

The Order is effective from 29.03.2019 with the appointed date of April 1, 2017. The transactions accounted in the books of the Transferor Company during the intervening period has now been incorporated in the books of the Transferee Company with effect from the appointed date. Accordingly the company has prepared the financial statements including cash flow for the year ended March 2018 with the comparatives of the previous year standalone figures of National Fittings Ltd.,

As regards the position on transfer and vesting of all the assets and liabilities of the Transferor Company to Transferee Company as on the appointed date, the exercise is carried out now taking the base as the appointed date from the audited accounts of both Transferor and Transferee Company.

All asset and liabilities of the IIL and MIL were recorded at their respective book values under the respective accounting heads of the Company. The resultant difference on account of transfer of net assets of both IIL and MIL of Rs. 188.23 lakhs has been adjusted to Capital Reserve of the Company.

Pursuant to amalgamation, the bank accounts, agreements, licences and immovable properties of the Transferor Companies are in the process of being transferred in the name of the Company.

2.3 In respect of actuarial valuation, the actuarial valuation as at 31.3.2018 of transferor companies & transferee companies adopted as it is.

2.4 Previous year figures

Previous year’s figures have been restated, rearranged and regrouped, wherever necessary, including providing comparative figures of standalone figures of National Fittings Ltd., as at 31.03.2017.

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Mar 31, 2017

1. Employee benefit plans

2. Defined contribution plans

The Company makes Provident Fund and Superannuation Fund contributions to defined contribution plans for qualifying employees. Under the Schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company recognized Rs. 9,75,811 (Year ended 31 March, 2016 Rs.6,20,109) towards Provident Fund contribution and Rs.8,93,271 (Year ended 31 March, 2016 Rs.7,20,840) towards Employees State Insurance contribution in the Statement of Profit and Loss. The contributions payable are at the rates specified in the rules of the schemes.

3. Defined benefit plans

The Company offers the following employee benefit schemes to its employees:

4. Gratuity

5. Leave Encashment

6. Proposed Dividend:

Final Dividend of Rs.166.40 Lacs (Rs.2 per share) has been recommended by the Board for the year ended 31st march 2017. The Central Government vide notification dated 30.03.2016 has amended the Companies (Accounting Standards) Rules, 2006. According to the amended Rule, the dividend declared after the Balance Sheet date shall not be recorded as a liability in the previous year. Therefore, the company has not recorded Rs.200.28 lacs as liability for proposed dividend including dividend distribution tax as at 31st March 2017. However, the same will be recognized as liability on approval of the shareholders in the Annual General Meeting.

7. Disclosure of Specified Bank Notes (SBNs)

During the year, the Company had specified bank notes or other denomination note as defined in the MCA notification G.S.R. 308(E) dated March 31, 2017 on the details of Specified Bank Notes (SBN) held and transacted during the period from November 8, 2016 to December, 30 2016, the denomination wise SBNs and other notes as per the notification is given below:

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Mar 31, 2016

Note:

(i) Balances with banks include deposits with scheduled bank amounting to Rs. 8, 83, 82,831/- (As at 31 March, 2015 Rs. 6, 45, 28,623/-) which have an original of 12 months.

(ii) Disclosures required under Section 22 of the Micro, Small and Medium Enterprises Development Act, 2006 As per the information available with the company till date, none of the suppliers have informed the company about their having registered themselves under the “Micro, Small and Medium enterprises development Act, 2006. As such information required under the Act cannot be complied and therefore not disclosed for the year.

Dues to Micro and Small Enterprises have been determined to the extent such parties have been identified on the basis of information collected by the Management. This has been relied upon by the auditors.

1. Employee benefit plans

2. a Defined contribution plans

The Company makes Provident Fund and Superannuation Fund contributions to defined contribution plans for qualifying employees. Under the Schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company recognized Rs. 6,20,109 (Year ended 31 March, 2015 Rs.5,53,492) towards Provident Fund contribution and Rs.7,20,840 (Year ended 31 March, 2015 Rs.7,30,939) towards Employees State Insurance contribution in the Statement of Profit and Loss. The contributions payable are at the rates specified in the rules of the schemes.

3. b Defined benefit plans

The Company offers the following employee benefit schemes to its employees:

I. Gratuity

ii. Leave Encashment

- The following table sets out the funded status of the defined benefit schemes and the amount recognized in the financial statements:

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Mar 31, 2015

(i) Terms / rights attached to shares

(a) The company has only one class of equity shares having at par value of Rs.10/- per share. Each holder of equity shares is entitled to one vote per share. The company declares and pays dividend in Indian rupees. The Board of Directors have recommended a dividend of Rs.1/- per equity share of Rs.10/- each amounting to Rs.83.20 Lacs excluding Dividend Distribution Tax subject to approval of members in the Ensuing Annual General Meeting.

(b) The company has only one class of Preference shares having at par value of Rs.100/- per share which is non- convertible and non-cumulative. The preference shares are entitled to a dividend of 9% and will be redeemable at par subject to the provision of section 80 and other applicable provisions of the Companies Act, 1956 after the expiry of the sixth year but before the expiry of the twelfth year from the date of allotment of the shares by one or more installments at the option of the company by giving 3 month's notice. During the year, the company has redeemed 200,000 preference shares at Par. The Board of Directors have recommended a dividend of 9% on preference shares amounting Rs.27 lacs excluding dividend distribution tax. The Board of Directors have resolved to redeem 3,00,000 of preference shares of Rs.100/- each amounting to Rs.300 lacs.

(c) In the event of liquidation of the company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be proportion to the number of equity shares held by the shareholders.

# Working capital loans comprising of cash credit Export Packing Credit and other non fund based limits are secured by hypothecation of stocks and book debts and collaterally secured by Hypothecation of Machinery and equitable mortgage of property situate at Kaniyur Village.

Further the above are guaranteed personally by the Managing Director and a relative of the Managing Director and in addition to Corporate guarantee of M/s. Interfit India Limited, the holding company. During the year the company has not defaulted in repayment of loan and interest.

@ Demand Loan against Deposit was availed under the lien of Fixed Deposits with Bank of India. As at As at 31 March 2015 31 March, 2014

2.1 Contingent liabilities and commitments (to the extent not provided for)

(i) (a) Contingent liabilities

(1) Claims against the Company not acknowledged as debt (In respect of the appeal filed by the Central Excise department for the Modvat claim of Rs3,85,764/ - the CECAT has decided in favour of the department, reducing the claim 283,658 283,658 to Rs2,83,658/- against which the Company has preferred an appeal with the High Court, Chennai. However the Company has paid the duty amount of Rs2,83,658/- under protest).

(2) Other money for which the Company is contingently liable

a) Sales Tax refund for exports disallowed for invisible loss from Sept'11 to Feb'13 by the Commercial Tax Department ___ 678 333 but claimed by the company pending decision before High , Court of Chennai.

b) Letter of Credit established by the Bankers and outstanding as on the date of the Balance Sheet 1,206,374 24,972,748

c) Export bills discounted with Bankers as on the date of the 28,294,07 7 33,808,103 Balance Sheet

d) Estimated differential Sales Tax liability on account of 374,432 328,354 non-receipt of C-Forms

(b) Commitments

Estimated amount of contracts remaining to be executed on 1 000 000 160 000 capital account and not provided for

(ii) Disclosures required under Section 22 of the Micro, Small and Medium Enterprises Development Act, 2006 As per the information available with the company till date, none of the suppliers have informed the company about their having registered themselves under the "Micro, Small and Medium enterprises development Act, 2006. As such information required under the Act can not be complied and therefore not disclosed for the year.

Dues to Micro and Small Enterprises have been determined to the extent such parties have been identified on the basis of information collected by the Management. This has been relied upon by the auditors.

2.2 Employee benefit plans

2.2 a Defined contribution plans

The Company makes Provident Fund and Superannuation Fund contributions to defined contribution plans for qualifying employees. Under the Schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company recognised ' 5,53,492 (Year ended 31 March, 2014'5,01,436) towards Provident Fund contribution and Rs7,30,939 (Year ended 31 March, 2014'6,21,684) towards Employees State Insurance contribution in the Statement of Profit and Loss. The contributions payable are at the rates specified in the rules of the schemes.

2.3 b Defined benefit plans

The Company offers the following employee benefit schemes to its employees:

i. Gratuity

ii. Leave Encashment

The following table sets out the funded status of the defined benefit schemes and the amount recognised in the financial statements:

2.4 Related party transactions

Description of relationship Names of related parties

Holding Company Interfit India Ltd

Enterprises in which Directors have

Significant influence Merit Industries Ltd

Serna Impex Pvt. Ltd.

Haitima India Pvt. Ltd.

Key Management Personnel A V Palaniswamy (Managing Director)

Panath Anitha (Executive Director - w.e.f. 14.02.2015)

J Saravanan (Chief Financial Officer - w.e.f. 01.10.2014)

Relatives of Key Management Personnel Mrs Kumudha Palaniswamy and their Enterprises (wife of Mr A V Palaniswamy)

Note: Related parties as identified by the Management.

In accordance with Accounting Standard 22, the deferred tax Asset of Rs. 18.70 lacs for the year have been recognised in Profit and Loss Statement.

2.5 Change in Accounting Estimate

a) Pursuant to the enactment of the Companies Act, 2013 (the 'Act'), the Company has, effective 1st April'2014, reviewed and revised the estimated useful lives of its Fixed Assets, generally in accordance with the provisions of Schedule II to the Act. The consequential impact (after considering the transition provision specified in Schedule II) on the depreciation charged and on the results for the year ended is higher by Rs. 62.87 lacs

b) The Input Tax Credit under the sales tax laws which had been accounted on accrual basis till last year is being accounted as cash basis from this year, amounting to Rs.82.86 lacs in view of the uncertainties in its realisation and to this extent the profit declared is lower by this amount.

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Mar 31, 2014

1. Corporate Information

Interfit Techno Products Limited incorporated as a Public Limited Company under the Provision of Companies Act, 1956 to manufacture and market SG Iron Grooved and Screwed Pipe Fittings, Stainless Pipe Fittings and Ball Valves for industrial and non-industrial applications, have its name changed to National Fittings Limited with effect from 27.09.2013, to take advantage of the NATIONAL Brand name of the product.

2. Terms / rights attached to shares

(a) The company has only one class of equity shares having at par value of Rs.10/- per share. Each holder of equity shares is entilted to one vote per share. The company declares and pays in Indian Rupees. The Board of Directors have recommended a dividend of Re.1/- per equity share of Rs.10/- each, amounting to Rs. 83.20 lacs excluding divident tax subject to approval of members in ensuring Annual General Meeting.

(b) The company has only one class of Preference shares having at par value of Rs.100/- per share which is non-convertible and non-cumulative. The preference shares are entitled to a dividend of 9% and will be redeemable at par subject to the provision of section 80 and other applicable provisions of the Companies Act, 1956 after the expiry of the sixth year but before the expiry of the twelfth year from the date of allotment of the shares by one or more installments at the option of the company by giving 3 month''s notice. The Board of Directors have recommended a dividend of 9% on preference shares amounting to Rs.45 lacs excluding dividend tax. The Board of Directors have resolved to redeem 2,00,000 of preference shares of Rs.100/- each amounting to Rs.200 lacs.

(c) In the event of liquidation of the company, the holders of equity shares will be entilted to receive remaining assets of the company, after distibution of all preferential amounts. The distribution will be proportion to the number of equity shares held by the shareholders.

3. Working capital loans comprising of cash credit Export Packing Credit and other non fund based limits are secured by hypothecation of stocks and book debts and collaterally secured by the equitable mortgage of Block Assets and Hypothecation of Machinery.

Further the above are guaranteed personally by the Managing Director and a relative of the Managing Director and also by Corporate guarantee of M/s. Interfit India Limited, the holding company. During the year the company has not defaulted in repayment of loan and interest.

4. Contingent liabilities and commitments (to the extent not provided for)

(i) (a) Contingent liabilities As at As at 31 March 2014 31 March, 2013

(1) Claims against the Company not acknowledged as debt (In respect of the appeal filed by the Central Excise department for the Modvat claim of Rs. 3,85,764/- the CECAT has decided in favour of the department, reducing the claim to Rs. 2,83,658/- 283,658 283,658 against which the Company has preferred an appeal with the High Court, Chennai. However the Company has paid the duty amount of Rs. 2,83,658/- under protest).

(2) Other money for which the Company is contingently liable

a) Sales Tax refund for exports disallowed for invisible loss from Sept''11 to Feb''13 by the Commercial Tax Department but claimed by the 678 333 678 333 company pending decision before High Court of Chennai.

b) Letter of Credit established by the Bankers and outstanding as on 24,972,748 5,64631 the date of the Balance Sheet

c) Export bills discounted with Bankers as on the date of the Balance Sheet 33,808,103 21,684,599



d) Estimated differential Sales Tax liability on account of non- 328,354 - receipt of C-Forms

(b) Commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for 160,000 266,625

(ii) DisclosuresrequiredunderSection22oftheMicro,Smalland MediumEnterprisesDevelopmentAct,2006 As per the information available with the company till date, none of the suppliers have informed the company about their having registered themselves under the "Micro, Small and Medium enterprises development Act, 2006. As such information required under the Act can not be complied and therefore not disclosed for the year.

Dues to Micro and Small Enterprises have been determined to the extent such parties have been identified on the basis of information collected by the Management. This has been relied upon by the auditors.

5. Employee benefit plans

a Defined contribution plans

The Company makes Provident Fund and Superannuation Fund contributions to defined contribution plans for qualifying employees. Under the Schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company recognised Rs. 5,01,436 (Year ended 31 March, 2013 Rs.4,50,960) towards Provident Fund contribution and Rs.6,21,684 (Year ended 31 March, 2013 Rs.5,82,448) towards Employees State Insurance contribution in the Statement of Profit and Loss. The contributions payable are at the rates specified in the rules of the schemes.

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Mar 31, 2013

1.1 Employee benefit plans

1.1 a Defined contribution plans

The Company makes Provident Fund and Superannuation Fund contributions to defined contribution plans for qualifying employees. Under the Schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company recognised '' Rs. 4,50,960 (Year ended 31 March, 2012 Rs.8,17,708) towards Provident Fund contribution and Rs.5,82,448 (Year ended 31 March, 2012 Rs.4,79,816) towards Employees State Insurance contribution in the Statement of Profit and Loss. The contributions payable are at the rates specified in the rules of the schemes.

1.1 b Defined benefit plans

The Company offers the following employee benefit schemes to its employees: i. Gratuity

ii. Leave Encashment

The following table sets out the funded status of the defined benefit schemes and the amount recognised in the financial statements:

1.2 Related party transactions

Description of relationship Names of related parties

Holding Company Interfit India Ltd

Associates Merit Industries Ltd

Mem Engineering Private Limited

Key Management Personnel AV Palaniswamy (Managing Director)

R Alagar (Director) M Loganathan ( Director) K Arunachalam ( Director) Philip K Baby (Director- up to 13.08.2012)

Relatives of Key Management Personnel Mrs Kumudha Palaniswamy and their Enterprises (wife of Mr A V Palaniswamy)

Note: Related parties as identified by the Management.

Details of related party transactions during the year ended 31 March, 2013 and balances outstanding as at 31 March, 2013

1.3 Taxation

a. Provision for Income Tax including Minimum Alternate Tax u/s 115 JB of the Income Tax Act, 1961 has been made considering the carried forward losses of earlier years.

The MAT credit entitlement of Rs. 41.42 lakhs has been accounted.

The Company''s financial projections for future years indicate that the unabsorbed depreciation and business losses allowable under under Income Tax Act 1961 will be utilized.

In accordance with Accounting Standard 22, the deferred tax Asset of Rs. 176.85 lacs for the year have been recognised in Profit and Loss Statement.

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Mar 31, 2012

(i) Terms / rights attached to shares

(a) The company has only one class of equity shares having at par value of Rs 10/- per share. Each holder of equity shares is entitled to one vote per share. The company declares and pays dividend in Indian rupees. No dividend has been proposed by the board of directors during the year

(b) The company has only one class of Preference shares having at par value of Rs 100/- per share which is non-convertible and non-cumulative. The preference shares are entitled to a dividend of 9% and will be redeemable at par subject to the provision of section 80 and other applicable provisions of the Companies Act, 1956 after the expiry of the sixth year but before the expiry of the twelfth year from the date of allotment of the shares by one or more installments at the option of the company by giving 3 month's notice.

(c) In the event of liquidation of the company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be proportion to the number of equity shares held by the shareholders.

# Working capital loans comprising of Cash Credit, Export Packing Credit and other non-fund based limits are secured by hypothecation of stocks and book debts and collaterally secured by the equitable mortgage of Block Assets and Hypothecation of Machinery. Further the above are guaranteed personally by the Managing Director and a relative of the Managing Director and also by Corporate guarantee of M/s. Interfit India Limited, the holding company. During the year the company has not defaulted in repayment of loan and interest.

@ Lien has been marked on the Term Deposit for the Loans availed.

## The Company has been granted Eligibility Certificate entitled to the benefit of IFST deferral scheme for manufacturing SS Fittings for nine years ending 30.11.03 for deferral of sales tax not exceeding Rs 390.45 lakhs against which the company had availed Rs 25.89 lakhs. Such sales tax deferred has to be repaid before November 2012 in stipulated instalments commencing from December 2003 and the company has so far paid Rs 19,64,158/- (Previous year Rs 13,50,177).

During the year the company has not defaulted in repayment of IFST Instalments.

Trade payables are dues in respect of goods purchased or services received (including from employees, professionals and others under contract) in the normal course of business.

@ Trade payables include Rs 44,74,804 due to M/s. Interfit India Limited, the Holding Company.

As at As at 31 March 2012 31 March, 2011

1.1 Contingent liabilities and commitments (to the extent not provided for)

(i) Contingent liabilities

(a) Claims against the Company not acknowledged as debt (In respect of the appeal filed by the Central Excise department for the Modvat claim of Rs 3,85,764/- the CECAT has decided in favour of the department, reducing the claim 2,83,658 2,83,658 to Rs 2,83,658/- against which the Company has preferred an appeal with the High Court, Chennai. However the Company has paid the duty amount of Rs 2,83,658/- under protest).

(b) Other money for which the Company is contingently liable

Letter of Credit established by the Bankers and outstanding 81,45,490 68,48,644 as on the date of the Balance Sheet

Export bills discounted with Bankers as on the date of the 2,34,11,940 1,11,84,752 Balance Sheet

(ii) Disclosures required under Section 22 of the Micro, Small and Medium Enterprises Development Act, 2006 As per the information available with the company till date, none of the suppliers have informed the company about their having registered themselves under the "Micro, Small and Medium enterprises development Act, 2006. As such information required under the Act can not be complied and therefore not disclosed for the year.

Dues to Micro and Small Enterprises have been determined to the extent such parties have been identified on the basis of information collected by the Management. This has been relied upon by the auditors.

1.2 Employee benefit plans

1.3 a Defined contribution plans

The Company makes Provident Fund and Superannuation Fund contributions to defined contribution plans for qualifying employees. Under the Schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company recognised Rs 8,17,708/- (Year ended 31 March, 2011 Rs 5,08,297/-) for Provident Fund contributions and Rs 4,79,816/- (Year ended 31 March, 2011 Rs 3,03,138/-) for Employees State Insurance contributions in the Profit and Loss Statement. The contributions payable to these plans by the Company are at rates specified in the rules of the respective schemes.

1.4 a Defined benefit plans

The Company offers the following employee benefit schemes to its employees:

i. Gratuity

ii. Leave Encashment

*** Since no Preference dividend on non-cumulative preference shares provided for in the books, entire profit after tax is attributed towards equity share holders.

1.5 Taxation

a. Provision for Income Tax including Minimum Alternate Tax u/s 115 JB of the Income Tax Act, 1961 has been made considering the carried forward losses of earlier years. Accordingly, the MAT credit entitlement of Rs 44.71 lakhs has been recognised.

The Company's financial projections for future years indicate that the unabsorbed depreciation and business losses allowable under under Income Tax Act 1961 will be utilized.

In accordance with Accounting Standard 22, the deferred tax Asset of Rs 3.85 lacs for the year have been recognised in Profit and Loss Statement.

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Mar 31, 2010

1. CONTINGENT LIABILITIES NOT PROVIDED FOR:

Letter of Credit established by the Bankers and outstanding as on the date of the Balance sheet Rs. 17,56,845/-. (Previous year Rs. 17,91,216/-)

Export bills discounted with Bankers as on 31.03.2010 Rs. 85,04,380/- (Previous year Rs. 1,31,07,399/-)

In respect of the appeal filed by the Central Excise department for the Modvat Claim of Rs 3,85,764/- the CEGAT has decided in favour of the department, though reducing the claim to Rs.2,83,658/- against which the Company has preferred an appeal with the High Court, Chennai. However the Company has paid the duty amount of Rs.2,83,658/- under protest.

The Appeal preferred for 1999-2000 for levy of sales tax and penalty of Rs 2,57,100/- has been decided in favour of the Company and relief given to the extent of Rs 2,40,270/-. The Company has preferred further appeals seeking relief for the balance amount, which however has been paid.

2. Net Loss on account of Exchange fluctuation included in Profit & Loss Account Rs 86,207 (Previous Year Net Loss Rs 10,01,251/-)

3. Investments in National Savings Certificates, have been pledged with Sales Tax Authorities. 7. Disclosure Pursuant to Accounting Standard - 15 "Employee Benefits "

Defined Benefit Plan

The present Value of obligation is determined based on actuarial valuation using Projected Unit Credit method. Under this method the present value of the accrued service benefits is calculated after taking into account the usual decrements such as death, withdrawal etc before normal retirement date and projecting the qualifying salary up to the expected date of cessation of service as assumed in the probability distribution of decrements stated above using actuarial techniques based on multiple decrement table and related commutation function.

4. Plan Assets are managed by Life Insurance Corporation of India in terms of the Group Gratuity Scheme.

5. Disclosure as required by Accounting Standard 19 "Leases" issued by the Institute of Chartered Accountants of India are given below:

The Company has taken premises on lease which is generally non cancellable and the lease payments are recognised in the statement of Profit and Loss account under "Rent".

6. In the opinion of Directors, current assets, loans and advances have the values at which they are stated in the Balance Sheet, if realised in the ordinary course of business.

The Companys financial projections for future years indicate that the unabsorbed depreciation and business losses allowable under the provisions of income Tax Act 1961 will be utilized.

In accordance with Accounting Standard 22, the deferred tax Asset of Rs 4.30 lacs for the year have been recognised in Profit and Loss account.

7. Related party information:

1. RELATIONSHIP:

A. Where Control Exits:

a) INTERFIT INDIA LIMITED

b) MERIT INDUSTRIES LIMITED

B. Key Management Personnel:

A.V. Palaniswamy (Managing Director)

R. Alagar (Director)

M. Loganathan (Director)

K. Arunachalam (Director)

Philip K Baby (Director)

C. Relatives of Key Management Personnel and their Enterprises

Mrs. Kumudha Palaniswamy

Notes : 1. Related party relationship on the basis of the requirements of AS18 as in 1(A) to (C) is pointed and relied upon by the auditors.

8. The company has been granted Eligibility Certificate whereby the company is entitled to the benefit of IFST deferral scheme for manufacturing SS Fittings for nine years ending 30.11.03 for deferral of sales tax not exceeding Rs. 390.45 lakhs against which the company had availed Rs. 25.89 lakhs. Such sales tax deferred has to be repaid before November 2012 in stipulated installments commencing from December 2003 and the Company so for has paid Rs 9, 34,863/- (Previous Year Rs.6,96,206/-)

9. The Company is a subsidiary of Interfit India Ltd under the provisions of section 4(1)(b)(ii)of the Companies Act 1956. The total no of equity shares held by the holding company M/s Interfit India Ltd as on 31.03.2010 is 46,97,810. (Previous Year 46,97,810)

10. As per the information available with the company till date, none of the suppliers have informed the company about their having registered themselves under the "Micro, Small and Medium enterprises development Act, 2006. As such information as required under the Act can not be compiled and therefore not disclosed for the year.

11 Confirmations of Balances have been sought from parties and the necessary adjustments have been made wherever applicable from those received. In respect of others, the balances as appearing in the books have been adopted.

12. Previous years figures have been regrouped and reclassified wherever necessary and practicable.