2.16 Provisions, Contingent Liabilities and Contingent
Assets
Provisions are recognized when the Company has a present obligation (legal or constructive) as a result of a past event, it
is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable
estimate can be made of the amount of the obligation. The expense relating to a provision is presented in the statement of
profit or loss net of any reimbursement. If the effect of the time value of money is material, provisions are discounted using a
current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in
the provision due to the passage of time is recognized as a finance cost.
A contingent liability is disclosed when:
(a) a possible obligation that arises from past events and whose existence will be confirmed only by the occurrence or non¬
occurrence of one or more uncertain future events not wholly within the control of the Company; or
(b) a present obligation that arises from past events but is not recognized because:
(i) it is not prob able that an out flow of resources embodying economic benefits will be required to settle the obligation;
or
(ii) the amount of the obligation cannot be measured with sufficient reliability.
A contingent asset is disclosed, when there is a possible asset that arises from past events and whose existence will be
confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of
the Company.
Contingent liabilities and assets are not recognized but are disclosed in notes.
2.17 Government Grants
Government grants are recognised where there is reasonable assurance that the grant will be received and all attached
conditions will be complied with. When the grant relates to an expense item, it is recognised as income on a systematic basis
over the periods that the related costs, for which it is intended to compensate, are expensed. Grant related to expenses are
deducted in reporting the related expense.
2.18 Non-current assets (or disposal groups) classified as held for sale
Non-current assets or disposal groups comprising of assets and liabilities are classified as ‘held for sale’ when all the following
criteria are met: (i) decision has been made to sell, (ii) the assets are available for immediate sale in its present condition, (iii)
the assets are being actively marketed and (iv) sale has been agreed or is expected to be concluded within 12 months of the
Balance Sheet date.
Subsequently, such non-current assets and disposal groups classified as ‘held for sale’ are measured at the lower of its
carrying value and fair value less costs of disposal. Non-current assets held for sale are not depreciated or amortised.
2.19 Earning Per Share
Basic earnings per equity share is computed by dividing the net profit attributable to the equity holders of the Company by
the weighted average number of equity shares outstanding during the period. Diluted earnings per equity share is computed
by dividing the net profit attributable to the equity holders of the Company by the weighted average number of equity shares
considered for deriving basic earnings per equity share and also the weighted average number of equity shares that could
have been issued upon conversion of all dilutive potential equity shares. Dilutive potential equity shares are deemed converted
as of the beginning of the period, unless issued at a later date. Dilutive potential equity shares are determined independently
for each period presented.
The Weighted average number of equity shares outstanding during the period is adjusted for events of bonus issue, buy back of
shares, bonus element in a rights issue to existing shareholders, share split and reverse share split (consolidation of shares).
2.20 Recent Accounting Pronouncements
The Ministry of Corporate Affairs (MCA) in consultation with National Financial Reporting Authority (NFRA) vide its notification
dated 23 March 2022, has made certain amendments in Companies (Indian Accounting Standard Rules), 2015. Such
amendments shall come into force with effect from 1 April 2022, but do not have a material impact on the financial statements
of the Company.
(i) Ind AS 103: Business combination
The amendments specify that to qualify for recognition as part of applying the acquisition method, the identifiable assets
acquired and liabilities assumed must meet the definitions of assets and liabilities in the Conceptual Framework for
Financial Reporting under Indian Accounting Standards (Conceptual Framework) issued by the Institute of Chartered
Accountants of India at the acquisition date. These changes do not significantly change the requirements of Ind AS 103.
This Company does not expect the amendment to have any significant impact in it ’s Financial Statements.
(ii) Ind AS 37: Provisions, Contingent Liabilities, and Contingent Assets
The amendments specif y that the ‘cost of fulfilling’ a contract comprises the ‘costs that relate directly to the contract ’.
Costs that relate directly to a contract can either be incremental costs of fulfilling that contract (examples would be direct
labour, materials) or an allocation of other costs that relate directly to fulfilling contracts.
Since Company’s current practice is in line with the clarifications issued, there may not be material effect on the financial
statements of the Company.
(iii) Ind AS 109: Financial Instruments
The amendment clarifies which fees an entity includes when it applies the ‘10 percent’ test of Ind AS 109 in assessing
whether to derecognise a financial liability. Since Company current practice is in line with the clarifications issued, there
may not be material effect on the financial statements of the Company.
(iv) Ind AS 16: Property, Plant and Equipment
The amendments mainly prohibit an entity from deducting from the cost of property, plant and equipment amounts
received from selling items produced while the company is preparing the asset for its intended use. Instead, an entity will
recognise such sales proceeds and related cost in profit or loss. The Company does not expect the amendments to have
any impact on the financial statements.
b) There was a contingent liability amounting to ' 6209 Lakhs relating to a levy of electricity duty on the Company’s erstwhile
Thermal Power Plant situated at Raipur, Chattosgarh State. While the Company has obtained a stay from the High Court
of Chattisgarh against recovery of dues, the Company in the meanwhile settled the entire princpal amount to the Govern¬
ment of Chattisgarh to the tune of ' 957 lakhs which was paid in FY 2024-25. According to the policies of Government
of Chattisgarh, the Company is eligible for exemption from interest payment and the Company has applied for the same
and is awaiting orders.
c) There are dues relating to KVAT, ' 771.03 Lakhs for the year 2012-13'468.34 lakhs for FY 2013-14'3,258.10 lakhs for
FY 2014-15. Relating to CST ' 45.95 lakhs for the FY 2016-17
Financial risk management
Financial risk factors
The Company ’s principal financial liabilities comprise of borrowings, trade and other payables. The main purpose of these finan¬
cial liabilities is to manage finances for the Company’s operations. The Company’s principal financial assets include loans and
advances, investment in equity instruments and mutual funds, trade receivables and cash and bank balances that arise directly
from its operations. The Company also enters into derivative transactions to hedge foreign currency and interest rate risks and not
for speculative purposes. The Company is exposed to market risk, credit risk and liquidity risk and the Company’s senior manage¬
ment oversees the management of these risks.
Market risk
Market risk is the risk that the fair value of future cash flows of a financial asset will fluctuate because of changes in market prices.
The Company’s activities expose it to a variety of financial risks, including the effects of changes in foreign currency exchange
rates and interest rates.
Currency risk
Foreign currency risk is the risk that fair value of future cash flows of an exposure will fluctuate because of changes in foreign
exchange rates. The Company’s exposure to the risk of changes in foreign exchange rates relates primarily to the Company’s op¬
erating activities. The Company has obtained foreign currency loans and has foreign currency trade payables and receivables and
is therefore, exposed to a foreign exchange risk. For mitigating exposure to foreign exchange risk, the Company adopts a policy
of selective hedging based on the risk perception of the management. The Company has entered into foreign currency forward
contracts and cross currency swap contracts.
Interest rate risk
Interest rate risk is the risk that the fair value of future cash flows of an exposure will fluctuate because of changes in market in¬
terest rates. The Company’s exposure to the risk of changes in market interest rates relates primarily to the Company’s long-term
debt obligations with floating interest rates. Any changes in the interest rates environment may impact future cost of borrowings.
To manage this, the Company has entered into interest rate swap contracts, in which it agrees to exchange, at specific intervals,
the difference between fixed and variable interest amounts calculated by reference to an agreed upon principal amount.
Liquidity risk
Liquidity risk is the risk that the Company may not be able to meet its present and future cash and collateral obligations without
incurring unacceptable losses. The Company’s objective is to maintain a balance between continuity of funding and flexibility
through the use of bank overdrafts, letters of credit and working capital limits.
2.44 Other Statutory Information:
(i) The Group does not have Benami Property, where any proceeding has been initiated or pending against the Company
for holding any Benami property.
(ii) The Group has not traded or invested in crypto currency or virtual currency during the financial year.
(iii) The Group does not have any such transaction which is not recorded in the books of accounts that has been
surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act 1961(such as
search, survey or any other relevant provisions of the Income Tax Act, 1961.
(iv) The Company has not provided any guarantee or security / granted loans and advances in nature of loans, secured
or unsecured to Companies, firms, LLP or Other Parties.
The MCA vide notification dated 24th March, 2021 has amended Schedule III to the Companies Act, 2013 in respect of
certain disclosures. Amendments are applicable from 1st April, 2021. The Group has incorporated the changes as per the
said amendment in the financial statements and has also changed comparative numbers wherever it is applicable.
As per our report of even date For and on Behalf of the Board
For DIVYA K.R. AND ASSOCIATES
Chartered Accountants
Firm Registration No: 027280S VINOD NARSIMAN K.RAMAKRISHNAN
Whole-time Director Whole-time Director
DIVYA K.R. DIN : 00035746 DIN : 02797842
Proprietor
Membership No : 228896
R.MUTHIAH U.KALIDOSS
Place : Coimbatore Chief Financial Officer Company Secretary
Date : 28.05.2025
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