M. Provisions and Contingent Liabilities:
Provisions are recognized when the company has a legal or constructive obligation as a
result of a past event, for which it is probable that a cash outflow will be required and a
reliable estimate can be made of the amount of 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).
Contingent Liabilities are disclosed when the company has a possible obligation or a present
obligation and it is probable that a cash outflow will not be required to settle the obligation.
N. Cash Flow Statement
Cash flows are reported using the indirect method, whereby profit / (loss) before tax is
adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of
past or future cash receipts or payments. The cash flows from operating, investing and
financing activities of the Company are segregated based on the available information.
O. Financial instruments
Financial assets and financial liabilities are recognised when the Company becomes a
party to the contractual provisions of the instruments.
Financial assets and financial liabilities are measured at fair value except when amortised
cost approach is used. Transaction costs that is 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) 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 profit or loss.
Financial assets
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 of financial assets
Debt instruments that meet the following conditions are subsequently measured at amortised
cost (except for debt instruments that are designated as at fair value through profit or loss
on initial recognition): the asset is held within a business model whose objective is to hold
assets in order to collect contractual cash flows; and the contractual terms of the instrument
give rise on specified dates to cash flows that are solely payments of principal and interest
on the principal amount outstanding. Debt instruments that meet the following conditions
are subsequently measured at fair value through other comprehensive income (“FVTOCI”)
(except for debt instruments that are designated as at fair value through profit or loss on
initial recognition): the asset is held within a business model whose objective is achieved
both by collecting contractual cash flows and selling financial assets; and the contractual
terms of the instrument give rise on specified dates to cash flows that are solely payments
of principal and interest on the principal amount outstanding. Interest income is recognised
in profit or loss for FVTOCI debt instruments. All other financial assets are subsequently
measured at fair value.
Effective interest method
The effective interest method is a method of calculating the amortised 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
recognised on an effective interest basis for debt instruments other than those financial
assets classified as at FVTPL. Interest income is recognised in profit or loss and is included
in the “Other income” line item.
Impairment of financial assets
The Company applies the expected credit loss model for recognising impairment loss on
financial assets measured at amortised cost, debt instruments at FVTOCI, 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.
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.
Financial liabilities and equity instruments
Classification as debt or equity
Debt and equity instruments issued by 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.
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.
Financial liabilities
Financial liabilities that are not held-for-trading and are not designated as at FVTPL are
measured at amortised cost at the end of subsequent accounting periods. The carrying
amounts of financial liabilities that are subsequently measured at amortised cost are
determined based on the effective interest method.
Interest expense that is not capitalised as part of costs of an asset is included in the
‘Finance costs' Line item. 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. All financial liabilities are subsequently measured at
amortised cost using the effective interest method or at FVTPL.
Derecognition of financial liabilities
The Company derecognises financial liabilities when, and only when, the Company's
obligations are discharged, cancelled or have expired.
Offsetting financial instruments
Financial assets and liabilities are offset and the net amount is reported in the balance
sheet where there is a legally enforceable right to offset the recognised amounts and there
is an intention to settle on a net basis or realise the asset and settle the liability
simultaneously. The legally enforceable right must not be contingent on future events and
must be enforceable in the normal course of business and in the event of default, insolvency
or bankruptcy of the Company or the counterparty.
Rounding off amounts
All amounts disclosed in financial statements and notes have been rounded off to the nearest
Lakh as per requirement of Schedule III of the Act, unless otherwise stated.
The company assesesses at each date of balance sheet whether a financial asset or a group
of financial assets is impaired. Ind AS-109 “Financial Instruments” requires expected credit
losses to be measured through a loss allowance. The company has used a practical expedi¬
ent & adjusted for foward looking information to compute expected credit losses. Based on
historical credit loss expreienced for the company & considering forward looking information,
there is no expected credit loss allowance on trade receivables.
Figures in the bracket indicate previous year figures.
1. Director's remuneration for the year 2025-2026 is as per limits prescribed under Section 197
read with Schedule V of the Companies Act, 2013.
2. All related party contracts / arrangements have been entered in ordinary course of business
and are approved by the board of directors.
3. The transactions with related parties are made on terms equivalent to those that prevail in
arm's length transactions. Outstanding balances at the year end are unsecured and settle¬
ment occurs in cash and cash equivalent.
39. Segment Reporting:
As per Ind AS 108, the company operates predominantly only in one operating segment, i.e.
finished products from Iron Ore. The company is captive consuming the whole power gener¬
ated through the power plant. Hence, there is no reportable operating segment.
40. Leases:
The Company has certain lease contracts for land. The Company's obligation under its lease
are secured by lessor's title to the leased assets. As per IND AS -116 ‘Leases' the disclo¬
sures of lease are given below:
Reasons for variance of more than 25% in above ratios
1) Current ratio has improved mainly due to decrease in short term borrowing of the company.
2) Debt Equity ratio has improved mainly due to increase in equity on account of current years profit & decrease in borrowings.
3) Net Capital Turnover Ratio has decreased due to increase in working capital.
4) Return on Invetment changed due to company has invested surplus fund in mutual fund to earn investment income.
The above ongoing project has been approved by the Board of Directors in accordance with
Rule 2(1 )(i) of the Companies (CSR Policy) Rules, 2014.
The unspent amount relating to the ongoing project has been transferred to a separate “Unspent
CSR Account” within the prescribed timeline under Section 135(6) of the Companies Act,
2013.
43. Employee Benefits :
As per Ind AS 19 “Employees benefits” the disclosures as defined in the Accounting Standard
are given below :
The amount recognized in the balance sheet and the movements in the net defined benefit
obligation over the year are as follows:
Changes in defined benefit obligation.
ii) The Company has provided a corporate guarantee to banks in respect of credit facilities
granted to its subsidiary company. The outstanding amount of such guarantee as at 31
March 2026 is ? 430 Lakh (Previous Year: NIL). The management believes that no liabil¬
ity is likely to arise on account of the above guarantee.
iii) Demand had been raised by M/s WESCO Ltd. in respect of arrear electricity charges
amounting to ? 16.58 lakh. The company had filed suit against the claim before the
pertinent Appellate Authorities and favorable verdict had been ruled in favour of the com-
pany. The company had paid 50% of the amount against the same which is shown under
Deposit Others under Short Term Loans and Advances as the company is claiming
refund of the same. However M/s WESCO Ltd. had filed petition before Hon. High Court
of Odisha. The company does not foresee any liability in respect of above contingent
liabilities and hence no provision has been made for the same.
iv) The Company had initiated arbitration proceedings in relation to disputes concerning the
performance of the Steam Turbine in the Power plant. The arbitral award dated 26th day
of November 2025 has been pronounced in favour of the Company. It awards the Com¬
pany Rs.746.44 lakhs and interest @ 18 percent per annum from the date pronounce¬
ment of the award if the payment is not made within 30 days from the date of the order.
The opposite party has filed an appeal against the said award & therefore pending dis¬
posal of appeal the amount receivable thereagainst has not been recognized in the
financial statements.
v) The Income-tax authorities (“the Department”) had conducted a search operation during
FY 2023-24. Pursuant thereto, the assessments for the relevant assessment years
have been concluded. The Company has received an assessment order dated 01 De¬
cember 2025 passed under Section 143(3) of the Income-tax Act, 1961, for FY 2023-24,
pursuant to which a demand of ? 32.31 lakhs has been raised by the Assistant Commis¬
sioner of Income Tax, Central Circle, Sambalpur. The Company has filed an appeal
against the said order before the Commissioner of Income Tax (Appeals) [CIT(A)]. Based
on the assessment of facts and legal advice obtained, the Management believes that no
material liability is likely to arise in respect of the aforesaid matter and accordingly no
provision is considered necessary in the financial statements.
b) Commitments
Estimated amount of contracts remaining to be executed on capital account and not
provided for INR 20.00 lakhs (net of advances) (P.Y.50.00 Lakhs).
45. Disclosure under Section 186(4) of the Companies Act, 2013
The Company has provided interest bearing (which is not lower than prevailing yield of
related Government security close to the tenure of the respective loans) unsecured
loans repayable on demand during the year aggregating to ? 235.60 Lakhs to its subsidiary
companies for temporary financial assistance. Year-end balance of loan to subsidiary is
?235.60 Lakhs.
46. 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 maximize
the shareholder value.
The company determines the capital requirement based on annual operating plans and
long-term and other strategic investment plans. The funding needs are met through
equity, cash generated from operations, long-term and short-term borrowings. The
Company monitors the capital structure on the basis of net debt to equity ratio and
maturity profile of the overall debt portfolio of the company. Net debt includes interest
bearing borrowing, cash and cash equivalents.
The table below summarizes the capital, net debt and net debt to equity ratio of the company
47. The company has commissioned captive Power Plant (CPP) during the FY 2016-17. The said
units are eligible to claim deduction under section 80IA of the Income tax act ,1961 with
respect to 100% of the profit & gains derived from this business for any Ten years in the
subsequent fifteen years (referred to as Tax Holiday Period). The Company has started availing
benefits under section 80IAof the Income Tax Act from the financial year 2021-22.
48. Advance for land includes ?645 Lacs paid to State Bank of India for purchase of land at
Rajgangpur, Odisha. The matter is sub-judice. Necessary adjustments in the financial will be
made based upon the outcome of the matter.
49. Financial Risk Management
a) Financial Risk Management Objectives:
The company's management monitors and manages the financial risks relating to the
operations of the company. These risks include market risk (including currency risk,
interest rate risk and other price risk), credit risk and liquidity risk.
(i) Market Risk
Market risk is the risk that the fair value or the future cash flows of a financial instrument
will fluctuate because of changes in market prices. Such change in value of financial
instruments may result from changes in the foreign currency exchange rates, interest
rates, credit, liquidity and other market changes.
Foreign Currency Risk
The company has its operations based mainly within the country. So, the company
does not have any significant foreign currency risks.
Interest Rate Risk
The company has investments mainly in fixed interest-bearing investments. Hence
the company is not significantly exposed to interest rate risks. The interest rate on
borrowings ranged from 8.95% to 9.25% in the previous year & 8.05% to 8.60% in
the current year.
(ii) Credit Risk
Credit Risk refers to the risk of default on its obligation by the counterparty resulting
in a financial loss. The maximum exposure to credit risk is on account of trade
receivables amounting to Rs.1067.20 Lakhs as at 31st March, 2026 and Rs. 1410.96
Lakhs as at 31st March, 2025. Trade receivables are typically unsecured and derived
from revenue earned from customers. Credit risk is managed by establishing credit
limits and reviewing the credit approvals provided to various customers. The company
has no expected credit loss as at 31st March, 2026.
(iii) Liquidity Risk
Liquidity risk is the risk that the company will encounter difficulty in meeting obligations
associated with financial liabilities that are settled by delivering cash or other financial
asset. The company's principal sources of liquidity are cash and cash equivalents,
bank fixed deposits and the cash that is generated from operations. The company
manages liquidity risk by maintaining adequate reserves and by continuously
monitoring forecast and actual cash flows. The company generates sufficient cash
flows from current operations which together with the available cash and cash
equivalents provide liquidity both in the short-term as well as in the long-term.
50 . Financial Instrument- Fair Value
Accounting classification and fair value
The following table shows the carrying amounts and fair values of financial assets and financial
liabilities, including their levels in the fair value hierarchy.
The carrying amounts of financial assets and liabilities by categories as provided below:
54. There is no proceeding initiated or pending against the company during the year for holding
any benami property under the Benami Transactions (Prohibition) Act, 1988 and rules made
thereunder.
55. The Company has borrowings from banks on the basis of security of current assets. The
quarterly returns or statements of current assets filed by the Company with banks or financial
institutions are generally in agreement with the books of accounts except some minor
differences which are not material to report.
56. The company is not declared willful defaulter by any bank or financial Institution or any other
lenders.
57. No scheme of arrangements has been approved during the year by the Competent Authority
in terms of Sections 230 to 237 of the Companies Act, 2013.
58. There is no transaction that has not been recorded in the books of accounts and surrendered
or disclosed as income during the year in the tax assessments under the Income Tax Act,
1961.
59. The company has complied with the number of layers prescribed under clause (87) of section
2 of the Act read with Companies (Restriction on number of Layers) Rules, 2017
60. The Company has not traded or invested in Crypto currency or Virtual Currency during the
financial year.
61. There is no creation or satisfaction of charges as at 31st March, 2026 pending with ROC
beyond the statutory period.
62. No funds have been advanced or loaned or invested (either from borrowed funds or share
premium or any other sources or kind of funds) by the Company to or in any other person or
entity, including foreign entities (“Intermediaries”) with the understanding, whether recorded in
writing or otherwise, that the Intermediary shall lend or invest in party identified by or on behalf
of the Company (Ultimate Beneficiaries).
63. The Company has not received any fund from any party (Funding Party) with the understanding
that the Company shall whether, directly or indirectly lend or invest in other persons or entities
identified by or on behalf of the Company (“Ultimate Beneficiaries”) or provide any guarantee,
security or the like on behalf of the Ultimate Beneficiaries.
64. Previous year's figures have been regrouped /reclassified wherever necessary to correspond
with the current year's classification/disclosure.
|