M. Provisions
Provisions are recognised when the Company has a
present obligation (legal or constructive) as a result of a
past event and it is probable that an outflow of resources,
that can be reliably estimated, will be required to settle
such an obligation.
The amount recognised as a provision is the best estimate
of the consideration required to settle the present
obligation at the end of the reporting period, taking
into account the risks and uncertainties surrounding
the obligation. When a provision is measured using the
cash flows estimated to settle the present obligation, its
carrying amount is the present value of those cash flows
(when the effect of the time value of money is material).
When some or all of the economic benefits required to
settle a provision are expected to be recovered from a
third party, a receivable is recognised as an asset if it is
virtually certain that reimbursement will be received and
the amount of the receivable can be measured reliably
Onerous contracts
Present obligations arising under onerous contracts
are recognised and measured as provisions.
However, before a separate provision for an onerous
contract is established, the Company recognises any
write down that has occurred on assets dedicated to
that contract. An onerous contract is considered to exist
where the Company has a contract under which the
unavoidable costs of meeting the obligations under the
contract exceed the economic benefits expected to be
received from the contract. The unavoidable costs under
a contract reflect the least net cost of exiting from the
contract, which is the lower of the cost of fulfilling it
and any compensation or penalties arising from failure
to fulfil it. The cost of fulfilling a contract comprises
the costs that relate directly to the contract (i.e., both
incremental costs and an allocation of costs directly
related to contract activities).
N. Financial Instruments
Financial assets and financial liabilities are recognised
when an entity becomes a party to the contractual
provisions of the instrument.
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 Statement of
Profit and Loss (FVTPL)) 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
and loss are recognised immediately in Statement of
Profit and Loss.
(i) Financial assets
(a) Recognition and initial measurement
A financial asset is initially recognised at fair value
and, for an item not at FVTPL, transaction costs
that are directly attributable to its acquisition or
issue. Purchases and sales of financial assets are
recognised on the trade date, which is the date
on which the Company becomes a party to the
contractual provisions of the instrument.
(b) Classification of financial assets
Financial assets are classified, at initial recognition
and subsequently measured at amortised cost, fair
value through other comprehensive income (OCI),
and fair value through profit and loss.
A financial asset is measured at amortized cost if it
meets both of the following conditions and is not
designated at FVTPL:
• The asset is held within a business model
whose objective is to hold assets 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.
A debt instrument is classified as FVTOCI only if it
meets both of the following conditions and is not
recognised at FVTPL;
• The 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.
Debt instruments included within the FVTOCI
category are measured initially as well as at each
reporting date at fair value. Fair value movements
are recognised in the Other Comprehensive Income
(OCI). However, the Company recognises interest
income, impairment losses & reversals and foreign
exchange gain or loss in the Statement of Profit and
Loss. On derecognition of the asset, cumulative gain
or loss previously recognised in OCI is reclassified
from the equity to Statement of Profit and Loss.
Interest earned whilst holding FVTOCI debt
instrument is reported as interest income using
the EIR method.
All equity investments in scope of Ind AS 109
are measured at fair value. The Company may
make an irrevocable election to present in other
comprehensive income subsequent changes in the
fair value. The Company makes such election on an
instrumentby-instrument basis. The classification
is made on initial recognition and is irrevocable.
The equity instruments which are strategic
investments and held for long term purposes are
classified as FVTOCI.
If the Company decides to classify an equity
instrument as at FVTOCI, then all fair value changes
on the instrument, excluding dividends, are
recognised in the OCI. There is no recycling of the
amounts from OCI to Statement of Profit and Loss,
even on sale of investment. However, the Company
may transfer the cumulative gain or loss within equity.
Equity instruments included within the FVTPL
category are measured at fair value with all changes
recognised in the Statement of Profit and Loss.
All other financial assets are classified as
measured at FVTPL.
In addition, on initial recognition, the Company
may irrevocably designate a financial asset that
otherwise meets the requirements to be measured
at amortised cost or at FVTOCI as at FVTPL if
doing so eliminates or significantly reduces and
accounting mismatch that would otherwise arise.
Financial assets at FVTPL are measured at fair
value at the end of each reporting period, with
any gains and losses arising on remeasurement
recognized in statement of profit or loss. The net
gain or loss recognized in statement of profit or
loss incorporates any dividend or interest earned
on the financial asset and is included in the ‘other
income’ line item.
(c) De-recognition of financial assets
The Company derecognizes 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.
(d) Impairment
The Company applies the expected credit
loss model for recognizing impairment loss on
financial assets measured at amortised cost, debt
instruments at FVTOCI, lease receivables, trade
receivables, other contractual rights to receive cash
or other financial asset, and financial guarantees
not designated as at FVTPL.
Expected credit losses are the weighted average
of credit losses with the respective risks of
default occurring as the weights. Credit loss is
the difference between all contractual cash flows
that are due to the Company in accordance
with the contract and all the cash flows that the
Company expects to receive (i.e. all cash shortfalls),
discounted at the original effective interest rate
(or credit-adjusted effective interest rate for
purchased or originated credit-impaired financial
assets). The Company estimates cash flows by
considering all contractual terms of the financial
instrument (for example, prepayment, extension,
call and similar options) through the expected life of
that financial instrument.
The Company measures the loss allowance for
a financial instrument at an amount equal to the
lifetime expected credit losses if the credit risk on
that financial instrument has increased significantly
since initial recognition. If the credit risk on a
financial instrument has not increased significantly
since initial recognition, the Company measures the
loss allowance for that financial instrument at an
amount equal to 12-month expected credit losses.
12-month expected credit losses are portion of the
life-time expected credit losses and represent the
lifetime cash shortfalls that will result if default
occurs within the 12 months after the reporting date
and thus, are not cash shortfalls that are predicted
over the next 12 months.
If the Company measured loss allowance for a
financial instrument at lifetime expected credit loss
model in the previous period, but determines at the
end of a reporting period that the credit risk has
not increased significantly since initial recognition
due to improvement in credit quality as compared
to the previous period, the Company again
measures the loss allowance based on 12-month
expected credit losses.
When making the assessment of whether there
has been a significant increase in credit risk since
initial recognition, the Company uses the change in
the risk of a default occurring over the expected life
of the financial instrument instead of the change
in the amount of expected credit losses. To make
that assessment, the Company compares the risk
of a default occurring on the financial instrument
as at the reporting date with the risk of a default
occurring on the financial instrument as at the date
of initial recognition and considers reasonable and
supportable information, that is available without
undue cost or effort, that is indicative of significant
increases in credit risk since initial recognition.
For trade receivables or any contractual right to
receive cash or another financial asset that result
from transactions that are within the scope of
Ind AS 115, the Company always measures the
loss allowance at an amount equal to lifetime
expected credit losses.
Further, for the purpose of measuring lifetime
expected credit loss allowance for trade receivables,
the Company has used a practical expedient
as permitted under Ind AS 109. This expected
credit loss allowance is computed based on
a provision matrix which takes into account
historical credit loss experience and adjusted for
forward-looking information.
The impairment requirements for the recognition
and measurement of a loss allowance are equally
applied to debt instruments at FVTOCI except
that the loss allowance is recognised in other
comprehensive income and is not reduced from the
carrying amount in the balance sheet.
The Company has performed sensitivity analysis
on the assumptions used and based on current
indicators of future economic conditions, the
Company expects to recover the carrying amount
of these assets.
e) Effective interest method
The effective interest method is a method of
calculating the amortized cost of a debt instrument
and of allocating interest income over the relevant
period. The effective interest rate is the rate that
exactly discounts estimated future cash receipts
(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 debt instrument,
or, where appropriate, a shorter period, to the net
carrying amount on initial recognition.
Income is recognized on an effective interest basis
for debt instruments other than those financial
assets classified as at FVTPL. Interest income is
recognized in profit or loss and is included in the
‘Other income’ line item.
(ii) Financial liabilities and equity instruments
a) Classification as debt or equity
Debt and equity instruments issued by a company
are classified as either financial liabilities or as
equity in accordance with the substance of the
contractual arrangements and the definitions of a
financial liability and an equity instrument.
b) Equity instruments
An equity instrument is any contract that
evidences a residual interest in the assets of
an entity after deducting all of its liabilities.
Equity instruments issued by the Company are
recognised at the proceeds received, net of direct
issue costs. Repurchase of the Company’s own
equity instruments is recognised and deducted
directly in equity. No gain or loss is recognised in
Statement of Profit and Loss on the purchase,
sale, issue or cancellation of the Company’s own
equity instruments
c) 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 either held for trading or it is
designated as at FVTPL.
A financial liability is classified as held for trading if:
• It has been incurred principally for the purpose
of repurchasing it in the near term; or
• on initial recognition it is part of a portfolio
of identified financial instruments that the
Company manages together and has a recent
actual pattern of short-term profit-taking; or
• it is a derivative that is not designated and
effective as a hedging instrument.
A financial liability other than a financial liability
held for trading may be designated as at FVTPL
upon initial recognition if:
• such designation eliminates or significantly
reduces a measurement or recognition
inconsistency that would otherwise arise;
• the financial liability forms part of a group of
financial assets or financial liabilities or both,
which is managed and its performance is
evaluated on a fair value basis, in accordance
with the Company’s documented risk
management or investment strategy, and
information about the grouping is provided
internally on that basis; or
• it forms part of a contract containing one
or more embedded derivatives, and Ind AS
109 permits the entire combined contract
to be designated as at FVTPL in accordance
with Ind AS 109.
Financial liabilities at FVTPL are stated at fair value,
with any gains or losses arising on remeasurement
recognized in Statement of Profit and Loss. The net
gain or loss recognized in Statement of Profit and
Loss incorporates any interest paid on the financial
liability and is included in the Statement of Profit
and Loss. For Liabilities designated as FVTPL, fair
value gains/losses attributable to changes in own
credit risk are recognised in OCI.
The Company derecognises financial liabilities
when, and only when, the Company’s obligations are
discharged, cancelled or they expire. The difference
between the carrying amount of the financial
liability derecognised and the consideration paid
and payable is 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.
d) De-recognition of financial/ liabilities :
The Company derecognizes financial liabilities
when, and only when, the Company’s obligations are
discharged, cancelled or have expired. An exchange
between with a lender of debt instruments with
substantially different terms is accounted for as an
extinguishment of the original financial liability and
the recognition of a new financial liability. Similarly, a
substantial modification of the terms of an existing
financial liability (whether or not attributable to
the financial difficulty of the debtor) is accounted
for as an extinguishment of the original financial
liability and the recognition of a new financial
liability. The difference between the carrying
amount of the financial liability derecognized and
the consideration paid and payable is recognised in
Statement of profit and loss.
O. Segment reporting:
Operating segments are reported in a manner consistent
with the internal reporting provided to the chief
operating decision maker. The Board of directors of the
Company has been identified as the Chief Operating
Decision Maker which reviews and assesses the financial
performance and makes the strategic decisions.
P. Cash and cash equivalents:
Cash and cash equivalent in the Balance Sheet comprise
cash at banks and on hand and short-term deposits with
an original maturity of three months or less, which are
subject to insignificant risk of changes in value.
For the purpose of the statement of cash flows, cash
and cash equivalent consists of cash and short term
deposits, as defined above.
Q. Earnings Per Share:
Basic Earning Per Share is computed by dividing the net
profit or (loss) after tax for the year attributable to the
equity shareholders by the weighted average number of
equity shares outstanding during the year.
Diluted Earnings per share is computed by dividing the
net profit or loss for the year by the weighted average
number of equity shares outstanding during the year as
adjusted for the effects of all dilutive potential equity
shares, except where the results are anti-dilutive.
3. Key sources of estimation uncertainty and Recent
Accounting Pronouncements:
In the course of applying the policies outlined in all
notes under section 2 above, the Company is required
to make judgments that have a significant impact on
the amounts recognized and to make estimates and
assumptions about the carrying amount of assets
and liabilities that are not readily apparent from other
sources. The estimates and associated assumptions are
based on historical experience and other factors that are
considered to be relevant. Actual results may differ from
these estimates.
The estimates and underlying assumptions are reviewed
on an ongoing basis. Revisions to accounting estimates
are recognized in the period in which the estimate is
revised if the revision affects only that period, or in the
period of the revision and future period, if the revision
affects current and future period.
A Key sources of estimation uncertainty
i) Useful lives of property, plant and equipment
Management reviews the useful lives of property,
plant and equipment at least once a year. Such lives
are dependent upon an assessment of both the
technical lives of the assets and also their likely
economic lives based on various internal and
external factors including relative efficiency and
operating costs. This reassessment may result in
change in depreciation and amortisation expected
in future periods..
ii) Mines restoration obligation
In determining the fair value of the Mines
Restoration Obligation, assumptions and estimates
are made in relation to mining reserve, discount
rates, the expected cost of mines restoration and
the expected timing of those costs.
iii) Contingencies
In the normal course of business, contingent
liabilities may arise from litigation and other claims
against the Company. Potential liabilities that are
possible but not probable of crystallizing or are
very difficult to quantify reliably are treated as
contingent liabilities. Such liabilities are disclosed in
the notes but are not recognized.
iv) Fair value measurements
When the fair values of financial assets or financial
liabilities recorded or disclosed in the financial
statements cannot be measured based on
quoted prices in active markets, their fair value is
measured using valuation techniques including the
Discounted Cash Flows model . The inputs to these
models are taken from observable markets where
possible, but where this is not feasible, a degree
of judgment is required in establishing fair values.
Judgments include consideration of inputs such as
liquidity risk, credit risk and volatility.
v) Taxes
Deferred tax assets are recognized for unused tax
losses to the extent that it is probable that taxable
profit will be available against which the losses can
be utilized. Significant management judgment is
required to determine the amount of deferred tax
assets that can be recognized, based upon the
likely timing and the level of future taxable profits
together with future tax planning strategies.
vi) Provisions and liabilities
Provisions and liabilities are recognized in the period
when it becomes probable that there will be a future
outflow of funds resulting from past operations
or events that can reasonably be estimated.
The timing of recognition requires application of
judgment to existing facts and circumstances
which may be subject to change. The amounts are
determined by discounting the expected future
cash flows at a pre-tax rate that reflects current
market assessment of time value of money and the
risk specific to the liability. Potential liabilities that
are remote are neither recognised nor disclosed
as contingent liability. The management decides
whether the matters needs to be classified as
‘remote,’ ‘possible’ or ‘probable’ based on expert
advice, past judgements, terms of the contract,
regulatory provisions etc
vii) Expected credit loss:
The measurement of expected credit loss on
financial assets is based on the evaluation of
collectability and the management’s judgement
considering external and internal sources of
information. A considerable amount of judgement is
required in assessing the ultimate realization of the
loans having regard to, the past collection history of
each party and ongoing dealings with these parties,
and assessment of their ability to pay the debt on
designated dates.
viii) Defined benefit plans:
The cost of defined benefit plan and other
post-employment benefits and the present value
of such obligations are determined using actuarial
valuations. An actuarial valuation involves making
various assumptions that may differ from actual
development in the future. These include the
determination of the discount rate, future salary
escalations and mortality rates etc. Due to the
complexities involved in the valuation and its
long term nature, a defined benefit obligation is
highly sensitive to changes in these assumptions.
All assumptions are reviewed at each reporting date.
B Application of new and amended standards :
The Ministry of Corporate Affairs vide
notification dated 9 September 2024 and 28
September 2024 notified the Companies (Indian
Accounting Standards) Second Amendment Rules,
2024 and Companies (Indian Accounting Standards)
Third Amendment Rules, 2024, respectively, which
amended/ notified certain accounting standards
(see below), and are effective for annual reporting
periods beginning on or after 1 April 2024:
Insurance contracts - Ind AS 117; and
Lease Liability in Sale and Leaseback -
Amendments to Ind AS 116
Their adoption has not had any significant impact on
the amounts reported in the financial statements.
Note 11. Deferred tax assets (net)
Income Tax expense
Indian companies are subject to Indian income tax on a standalone basis. For each fiscal year, the entity profit and loss is subject
to the higher of the regular income tax payable or the Minimum Alternative Tax (“MAT”).
Statutory income taxes are assessed based on book profits prepared under generally accepted accounting principles in India
adjusted in accordance with the provisions of the (Indian) Income Tax Act, 1961. Statutory income tax is charged at 25% plus a
surcharge and education cess with tax benefits or 22% plus a surcharge and education cess without tax benefits.
MAT is assessed on book profits adjusted for certain items as compared to the adjustments followed for assessing regular
income tax under normal provisions. MAT for the fiscal year 2023-24 is charged at 15% plus a surcharge and education cess.
MAT paid in excess of regular income tax during a year can be set off against regular income taxes within a period of fifteen years
succeeding the fiscal year in which MAT credit arises subject to the limits prescribed.
Business loss can be carried forward for a maximum period of eight assessment years immediately succeeding the assessment
year to which the loss pertains. Unabsorbed depreciation can be carried forward for an indefinite period.
Note :
14.1. The credit period on sales of goods ranges from 0 to 30 days with or without security. The Company charges interest on
receivable beyond credit period in case of certain customers.
14.2. The Company does not generally hold any collateral or other credit enhancements over these balances nor does it have a
legal right of offset against any amounts owed by the Company to the counterparty.
14.3. Trade Receivable does not include any receivable from Directors and Officers of the Company.
14.4. Trade receivable from related parties has been disclosed in note 37 e
14.5. Loss allowance is estimated for disputed receivables based on assessmenmt of each case where consider necessary.
14.6. Credit risk management regarding trade receivables has been described in note 34.
(ii) Terms/rights attached to 1% Optionally Convertible Cumulative Reedeemable Preference Share (OCCRPS)
The Company has one class of Preference Shares. These shares carry cumulative dividend @ 1%. These OCCRPS are
convertible into Equity Shares at the option of the Holder within a period of 18 months from the date of allotment, in one
or more tranches, at a price determined on the relevant date or to be redeemed at par upon maturity after 18 months but
within 9 years from date of allotment.
The option to convert the instrument into Equity shares lapsed on 04 August, 2022 ( valuation date ), and hence the nature
of instrument changes from this date and will be redeemed at par upon maturity. Accordingly, future estimated cash flows
of principal on redemption and cumulative coupon of 1% for 9 years are discounted at pre tax borrowing rate of 9.5% to
determine the fair value of the instrument at valuation date.
The difference between the issue price of OCCRPS and the fair value on valuation date ' 4,483.73 Lakhs treated as Equity
component of compounded financial instrument in the financial statement.
Retained earning :
Retained earnings are the profits that the Company has earned till date, less any transfers to general reserve, dividends or other
distributions paid to shareholders. Retained earnings includes re-measurement loss / (gain) on defined benefit plans, net of taxes
that will not be reclassified to Statement of Profit and Loss. Retained earnings is a free reserve available to the Company.
Capital Reserve :
Reserve is primarily created out of share forfeiture amounting ' 214.50 lakhs and amalgamation reserve amounting ' 566.03
lakhs as per statutory requirement.
Security premium reserve :
The amount received in excess of face value of the equity shares is recognised in securities premium. This reserve is utilised in
accordance with the specific provisions of the Companies Act 2013
Equity component of 1% optionally convertible cumulative redeemable preference shares
Upon expiry of conversion options given in OCCRPS, the Company has computed equity portion (based on concessional rate of
interest in OCCRPS) amounting to '4,483.73 lakhs.
Notes :
19.1. The above unsecured loan from related party has been taken from holding company, M/s. JSW Cement Limited. The tenure
of the loan is 5 years from the date of disbursement or 31 March, 2027 which ever is earlier or such ended time as may be
agreed and repayable at the end of the tenure alongwith interest accrued on the same. The rate of interest is 8.73%.
19.2. The company raised fund of ' 10,000.00 lakhs by issue of One Crore 1% optionally convertible cumulative redeemable
preference share (OCCRPS) of ' 100 each. These OCCRPS are convertible into Equity Shares at the option of the Holder
within a period of 18 months from the date of allotment in one or more tranches, at a price determined on the relevant date
or to be redeemed at par upon maturity after 18 months but within 9 years from date of allotment.
The option to convert the instrument into Equity shares lapsed on 04 August, 2022 ( valuation date ), and hence the nature
of instrument changes from this date and will be redeemed at par upon maturity. Accordingly, future estimated cash flows
of principal on redemption and cumulative coupon of 1% for 9 years are discounted at pre tax borrowing rate of 9.5% to
determine the fair value of the instrument at valuation date.
The difference between the issue price of OCCRPS and the fair value on valuation date ' 4,483.73 Lakhs treated as Equity
component of compounded financial instrument in the financial statement.
19.3. a) The applicable rate of interest on term loan from Axis Bank & Indian Bank is of 8.73% per annum till 28th March, 2025.
From 29th March, 2025 interest rate on loan from Axis Bank & Indian Bank has been reduced to 8.48%. However the
Interest rate on loan from Canara Bank remained at 8.73% per annum & Interest on term loan from DBS Bank carrying
interest @ 9.25% per annum. Interest are payable on monthly basis.
b. Term of Repayment
- 9 years ( 36 quarterly structured repayment) from quarter ending 31 December, 2024) for loan taken from Axis Bank,
Indian Bank & Canara Bank.
- 2 years (bullet repayment) from date of 1st drawal of loan from DBS Bank Limited.
c. Nature of security
- First pari-passu charge on project fixed assets (both movable & immovable) including assignment of lease hold right
of the land acquired for mining and project.
- Unconditional and irrevocable Corporate Guarantee of JSW Cement Limited - Holding company.
Note 34 : Financial instruments
A. Capital risk management
The Company being in a capital intensive industry, its objective is to maintain a strong credit rating healthy capital ratios
and establish a capital structure that would maximise the return to stakeholders through optimum mix of debt and equity.
The Company’s capital requirement is mainly to fund its capacity expansion, repayment of principal and interest on its
borrowings. The principal source of funding of the Company has been, and is expected to continue to be, cash generated
from its operations supplemented by bank borrowing and funding from holding company. The Company is not subject to
any externally imposed capital requirements.
The Company regularly considers other financing and refinancing opportunities to diversify its debt profile, reduce interest
cost and align maturity profile of its debt commensurate with life of the asset and closely monitors its judicious allocation
amongst competing capital expansion projects and strategic acquisitions, to capture market opportunities at minimum risk.
The Company monitors its capital using gearing ratio, which is net debt divided to total equity. Net debt includes, interest
bearing loans and borrowings less cash and cash equivalents, Bank balances other than cash and cash equivalents and
current investments.
Fair value hierarchy
This section explains the judgements and estimates made in determining the fair value of the financial instruments that are
(a) recognised and measured at fair value and
(b) measured at amortised cost and for which fair values are disclosed in the financial statements.
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.
Fair value of financial assets and liabilities measured at amortised cost
The carrying amount of Trade Receivable, Trade Payable, Capital Creditors, Cash and Cash Equivalents ,other Bank Balances
, other financial assets and liabilities are considered to be the same as their fair values due to their short term nature.
The management considers that the carrying amount of financial assets and financial liabilities recognised in the financial
statements approximate their fair values.
Financial risk management
Board of Directors of the Company has developed and are responsible for monitoring the Company’s risk management
policies. The risk management policies are established to ensure timely identification and evaluation of risks, setting
acceptable risk thresholds, identifying and mapping controls against these risks, monitor the risks and their limits, improve
risk awareness and transparency. Risk management policies and systems are reviewed regularly to reflect changes in the
market conditions and the Company’s activities to evaluate the adequacy of the risk management framework in relation to
the risk faced by the Company.
The risk management policies aim to mitigate the following risks arising from the financial instruments:
i) Market risk
ii) Credit risk
iii) Liquidity risk
iv) Commodity risk
i) Market Risk
Market risk is the risk of loss of future earnings, fair value or future cash flows that may result from a change in the price
of a financial instrument. The value of a financial instrument may change as a result of changes in the interest rates,
commodity prices and other market changes that effect market risk sensitive instruments. Market risk is attributable
to all market risk sensitive financial instruments including investments and deposits, and borrowings.
All such transactions are carried out within the guidelines set by the management.
a) Interest Rate Risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because
of changes in market interest rates. The Company is exposed to interest rate risk because funds are borrowed at
both fixed and floating interest rates. Interest rate risk is measured by using the cash flow sensitivity for changes
in variable interest rate. The borrowings of the Company are principally denominated in rupees with a mix of fixed
and floating rates of interest.
ii) Credit Risk Management
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the
Company. Credit risk encompasses of both, the direct risk of default and the risk of deterioration of creditworthiness
as well as concentration risks. The Company has adopted a policy of only dealing with creditworthy counterparties
and obtaining sufficient collateral, where appropriate, as a means of mitigating the risk of financial loss from defaults.
The carrying amount of financial assets represent the maximum credit risk exposure.
(a) Trade receivables
Customer credit risk is managed centrally by the Company and subject to established policy, procedures and
control relating to customer credit risk management. Credit quality of a customer is assessed based on an
individual credit limits defined in accordance with the assessment.
Trade receivables consist of a large number of customers spread across diverse industries and geographical areas
with no significant concentration of credit risk. No single customer accounted for 10.0% or more of revenue
in any of the years indicated except sales to holding company. The outstanding trade receivables are regularly
monitored and appropriate action is taken for collection of overdue receivables.
The carrying value of financial assets represents the maximum credit risk. The maximum exposure to credit risk
was ' 4,730.43 lakhs as at 31 March 2025 and ' 4,931.40 lakhs as at 31 March 2024, being the total carrying value
of trade receivables, balances with bank, bank deposits, current investments, loans and other financial assets.
As per simplified approach, the Company makes provision of expected credit losses on trade receivables using a
provision matrix to mitigate the risk of default payments and makes appropriate provision at each reporting date
wherever outstanding is for longer period and involves higher risk.
Our historical experience of collecting receivables indicate a low credit risk. Hence, trade receivables are considered
to be a single class of financial assets.
iii. Liquidity risk management
Liquidity risk refers to the risk of financial distress or extraordinary high financing costs arising due to shortage of
liquid funds in a situation where business conditions unexpectedly deteriorate and requiring financing. The Company
requires funds both for short term operational needs as well as for long term capital expenditure growth projects.
The company generate sufficient cash flow for operation, which together with the available cash and cash equivalent
provide liquidity in the short term & long term. The company has established an appropriate liquidity risk management
frame work for the management of the company’s short, medium & long term funding and liquidity management
requirement. The company manages liquidity risk by maintaining adequate reserve, banking facilities and reserve
borrowing facilities by continuously monitoring forecast and actual cash flows and by maching the maturity profile of
financial asset and liability.
The following tables detail the Company’s remaining contractual maturity for its non-derivative financial liabilities
with agreed repayment periods and its non-derivative financial assets. The tables have been drawn up based on the
undiscounted cash flows of financial liabilities based on the earliest date on which the Company can be required to
pay. The tables include both interest and principal cash flows.
To the extent that interest flows are floating rate, the undiscounted amount is derived from interest rate curves at
the end of the reporting year.The contractual maturity is based on the earliest date on which the Company may be
required to pay.
c) Employee Benefits:
i) Defined Contribution Plan:
Retirement Benefits in the form of Provident Fund which is defined contribution schemes are charged to the statement
of profit and loss for the year in which the contributions to the respective funds accrue as per relevant rules / statutes.
Company’s contribution to Provident Fund & other fund recognized in statement of Profit and Loss ' 109.45 Lakhs
(Previous Year ' 75.96 Lakh) ( included in note 28)
ii) Defined Benefit Plans
The Company provides for gratuity to its employees as per the Payment of Gratuity Act, 1972. The amount of gratuity
shall be payable to an employee on the termination of employment after rendering continuous service for not less
than five years, or on their superannuation or resignation. However, in case of death of an employee, the minimum
period of five years shall not be required. The amount of gratuity payable on retirement / termination is the employee’s
last drawn basic salary per month computed proportionately for 15 days salary multiplied by the number of years
of service completed. The Company does not fully fund the liability and maintains a target level of funding to be
maintained over period of time based on estimations of expected gratuity payments.
Compensation to key management personnel
Key managerial persons such as Whole Time Director, Chief Financial Officer, Company Secretary are in receipt of
remuneration from the holding company.
The amount paid for sitting fees to non executive independent director during the period is ' 12.15 lakhs (previous
year ' 12.00 lakhs),
Terms & Conditions
Sales :
The sales to related parties are made on terms equivalent to those that prevail in arm’s length transactions and in the
ordinary course of business. Sales transactions are based on prevailing price list and memorandum of understanding
signed with related parties. For the year ended 31 March, 2025, the Company has not recorded any impairment of
receivables relating to amounts owed by related parties.
Purchases :
Thepurchasesfrom relatedpartiesaremadeontermsequivalenttothosethatprevail inarm’s lengthtransactionsandinthe
ordinary course of business. Purchase transactions are made on normal commercial terms and conditions
and market rates.
Loan from Related Party :
The company has availed loan from its holding company for general corporate purpose. The loan balance as on 31
March, 2025 amounting ' 64,031.47 lakhs ( balance as on 31 March, 2024'69,759.09 lakhs). The loan is unsecured and
carry an interest @ 8.73% per annum and repayable after the end of the tenure.
g. During the year March 31, 2025, the Company has incurred loss of ' 14,247.66 lakhs and as on March 31, 2025, the Company’s
accumulated loss is ' 43,387.15 lakhs. Meanwhile, the Company has received rights issue proceeds of ' 40,000.00 lakhs
including securities premium of ' 38,000.00 lakhs which has resulted in positive net-worth. The Management is hopeful
of improving the performance of the company considering the improvement in the plant’s operational performance,
updated management strategies and business plan. Accordingly, these financial statements continue to be presented on a
going concern basis.
h. The Company has been maintaining its books of accounts in the SAP which has feature of recording audit trail of each and
every transaction, creating an edit log of each change made in books of account along with the date when such changes
were made and ensuring that the audit trail cannot be disabled, throughout the year as required by proviso to sub rule (1) of
rule 3 of The Companies (Accounts) Rules, 2014 known as the Companies (Accounts) Amendment Rules, 2021.
The Company did not come across any instance of audit trail feature being tampered with, in respect of accounting software
for the period for which the audit trail feature was operating.
Additionally, the audit trail has been preserved by the Company as per the statutory requirements for record retention.
i. Other Statutory information
1. The Company does not have any benami property, where any proceeding has been initiated or pending against the
Company for holding any benami property
2. The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
3. The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign
entities (Intermediaries) with the understanding that the Intermediary shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf
of the company (ultimate beneficiaries) or
(b) provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries.
4. The Company has not received any fund from any person(s) or entity(ies), including foreign entities (funding party) with
the understanding (whether recorded in writing or otherwise) that the Company shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf
of the funding party (ultimate beneficiaries) or
(b) provide any guarantee, security or the like on behalf of the ultimate beneficiaries.
5. The Company 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 or survey or any other relevant provisions of the Income Tax Act, 1961”
6. The Company has complied with the number of layers prescribed under clause (87) of section 2 of the Act read with
the Companies (Restriction on number of Layers) Rules, 2017”
7. The Company is not declared wilful defaulter by and bank or financials institution or lender during the year.
8. The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the
statutory period.
9. Presently no quarterly returns or statements of fund utilisation need to be filed by the Company with banks or
financial institutions.
10. The Company has used the borrowings from banks and financial institutions for the specific purpose for which
it was obtained.
11. The title deeds of all the immovable properties, (other than immovable properties where the Company is the lessee
andtheleaseagreementsaredulyexecutedinfavouroftheCompany)disclosedinthefinancialstatementsincludedinproperty,
plant and equipment and capital work-in progress are held in the name of the Company as at the balance sheet date.
12. The Company does not have any transactions with companies which are struck off.
j. As at 31 March 2025; the current liabilities exceeds current assets of the Company by ' 8,038.98 Lakhs. Based on
predicted cash flows from operations for the financial year 2025-26 and sanctions received from lenders to refinance the
long-term borrowings, the management is confident that the Company would be in a position to service its liabilities in the
foreseeable future.
k. The financial statements are approved for issue by the audit committee at its meeting held on 28 April, 2025 and by the
board of directors on 28 April, 2025.
l. Previous year’s figures have been regrouped / reclassified wherever necessary including those as required in keeping with
revised Schedule III amendments.
As per our report of even date For and on behalf of the Board of Directors
For Shah Gupta & Co.
Chartered Accountants
F.R.N. 109574W
Heneel K Patel Narinder Singh Kahlon Manoj Kumar Rustagi
Partner Director CEO & Whole Time Director
Membership No.: 114103 DIN No :0378016 DIN No : 07742914
UDIN: 25114103BMNAQX4216
Place: Mumbai Ishika Sharma Girish Menon
Date: 28 April, 2025 Company Secretary Chief Financial Officer
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