ae) Accounting for Provisions, Contingent Liabilities & Contingent Assets
In conformity with Ind-AS 37, ‘Provisions, Contingent Liabilities and Contingent Assets’, issued by the ICAI. A provision is recognized when the Company has a present obligation as a result of past event 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 and compensated absences) are not discounted to its 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 adjusted to reflect the current best estimates. Contingent liabilities are not recognized in the financial statements. A contingent asset is neither recognized nor disclosed in financial statements.
af) Provision for doubtful debts
The Management reviews on a periodical basis the outstanding debtors with a view to determine as to whether the debtors are good, bad or doubtful after taking into consideration all the relevant aspects. On the basis of such review and in pursuance of other prudent financial considerations the
management determines the extent of provision to be made in the accounts.
ag) Rounding of amounts
All amounts disclosed in the financial statements and notes have been rounded off to the nearest Crores as per the requirement of Schedule III, unless otherwise stated.
3. CRITICAL ESTIMATES AND JUDGMENTS
The preparation of these financial statements in conformity with the recognition and measurement principles of Ind AS requires the management of the Company to make estimates and assumptions that affect the reported balances of assets and liabilities, disclosures relating to contingent liabilities as at the date of the financial statements and the reported amounts of income and expense for the periods presented. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and future periods are affected. Key sources of estimation of uncertainty at the date of the financial statements, which may cause a material adjustment to the carrying amounts of assets and liabilities within the next financial year, is in respect of impairment of investments, useful lives of property, plant and equipment, valuation of deferred tax assets, provisions and contingent liabilities.
Impairment of Investments
The Company reviews its carrying value of investments carried at amortized cost annually, or more frequently when there is indication for impairment. If the recoverable amount is less than its carrying amount, the impairment loss is accounted for.
Useful lives of property, plant and equipment
Company reviews the useful life of property, plant and equipment at the end of each reporting period. This reassessment may result in change in depreciation expense in future periods.
Mine Closure, Site Restoration and Decommissioning Obligation The Company’s obligation for land reclamation and decommissioning of structures consists of spending at both surface and underground mines in accordance with the guidelines from Ministry of Coal, Government of India. The Company estimates its obligation for Mine Closure, Site Restoration and Decommissioning based upon detailed calculation and technical assessment of the amount and timing of the future cash spending to perform the required work. Mine Closure expenditure is provided as per approved Mine Closure Plan. The estimates of expenses are escalated for inflation, and then discounted at a discount rate that reflects current market assessment of the time value of money and the risks, such that the amount of provision reflects the present value of the expenditures expected to be incurred to settle the obligation. The Company records a corresponding asset associated with the liability for final reclamation and mine closure. The obligation and corresponding assets are recognised in the period in which the liability is incurred. The asset representing the total site restoration cost as per mine closure plan is recognised as a separate item in PPE and amortised over the balance project/mine life. The value of the provision is progressively increased over time as the effect of discounting unwinds; creating an expense recognised as financial expenses.
A. During previous year, the Company has converted 6,60,00,000 Convertible Warrants into Equity Shares of face value of '. 1/- each at a premium of ' 8.47/- each, The said convertible warrants were allotted on the terms that they shall be convertible (at the sole option of the warrant holder) at any time within a period of 18 months from the date of allotment of convertible warrants in the ratio of 1:1 issued at par via Preferential Allotment to the listed below company :
B. During the previous year, the Company has converted 1,00,00,000 Optionally Fully Convertible Debentures (“OFCD’s”) into Equity Shares of face value of '. 1/- each at a premium of ' 19/- each in the conversion ratio of 1:1, issued at par via Preferential Allotment to Thriveni Earthmovers Private Limited (“TEMPL” /“Thriveni”). The said allotted is a co-promoter of the Company.
C. The Company has allotted 4,29,315 (Previous Year 1,05,000) Equity Shares to the Lloyds Employees Welfare Trust under Lloyds Metals and Energy Limited Employee Stock Option Plan - 2017
D. During the previous year, the Company had allotted 6,00,00,000 OFCD’s to Sunflag Iron and Steel Co Limited (“Sunflag”) pursuant to Arbitration Award dated 22nd April, 2022 and an Additional / Supplementary Arbitration Award dated 28th April, 2022. Pursuant to the conversion letter received from Sunflag the said allotted 6,00,00,000 OFCD’s have been converted into 6,00,00,000 Equity Shares in the ratio of 1:1.
36) DISCLOSURE AS REQUIRED BY THE IND AS -19 “EMPLOYEES BENEFIT” IS GIVEN BELOW:
Defined benefit plan: The Company operates one defined benefit plan, viz., gratuity & Leave Encashment benefit, for its employees. The Gratuity & Leave Encashment plan provides for a lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days basic salary payable for each completed year of service. The company does not have any fund for gratuity liability or Leave liability and the same is accounted for as provision.
Under the other long term employee benefit plan, the company extends the benefit of compensated absences to the employees, whereby they are eligible to carry forward their entitlement of earned leave for encashment upon retirement / separation or during tenure of service. The Plan is not funded by the company.
37) FINANCIAL INSTRUMENT AND RISK MANAGEMENT
Fair values
1. The carrying amounts of trade payables, other financial liabilities (current), borrowings (current), trade receivables, cash and cash equivalents, other bank balances and loans are considered to be the same as fair value due to their short term nature.
2. Borrowings (non-current) consists of loans from banks and government authorities, other financial liabilities (noncurrent) consists of interest accrued but not due on deposits, other financial assets consist of employee advances where the fair value is considered based on the discounted cash flow.
3. The fair value of forward foreign exchange contracts is calculated as the present value determined using forward exchange rates, currency basis spreads between the respective currencies and interest rate curves.
The fair value of financial assets and liabilities is included at the amount at which the instrument could be exchanged in
a current transaction between willing parties, other than in a forced or liquidation sale.
38) FINANCIAL RISK AND CAPITAL RISK MANAGEMENT
A) Financial Risk
The business activities of the Company expose it to a variety of financial risks, namely market risks (that is, foreign exchange risk, interest rate risk and price risk), credit risk and liquidity risk. The Company’s risk management strategies focus on the unpredictability of these elements and seek to minimize the potential adverse effects on its financial performance.
The financial risk management for the Company is driven by the Company’s senior management and internal/ external experts subject to necessary supervision.
The Company does not undertake any speculative transactions either through derivatives or otherwise. The senior management is accountable to the Board of Directors and Audit Committee. They ensure that the Company’s financial risk-taking activities are governed by appropriate financial risk governance framework, policies and procedures. The Board of Directors periodically reviews the exposures to financial risks, and the measures taken for risk mitigation and the results thereof.
B) Foreign currency Risk
Foreign exchange risk arises on all recognised monetary assets and liabilities and on highly probable forecasted transactions which are denominated in a currency other than the functional currency of the Company. The Company does not have any foreign currency trade payables and receivables.
The foreign exchange risk management policy of the Company requires it to manage the foreign exchange risk by transacting as far as possible in the functional currency.
No Forward contracts were entered into by the company either during the year or previous years since the company has very minimum exposure to foreign currency risk.
i) Price risk
The Company uses surplus funds in operations and for further growth of the company. Hence, there is no price risk associated with such activity.
ii) Credit risk
Credit risk refers to the risk of default on its obligation by the counter party the risk of deterioration of creditworthiness of the counterparty as well as concentration risks of financial assets, and thereby exposing the Company to potential financial losses. The Company is exposed to credit risk mainly with respect to trade receivables.
Trade receivables
The Trade receivables of the Company are typically non-interest bearing un-secured. As there is no independent credit rating of the customers available with the Company, the management reviews the credit-worthiness of its customers based on their financial position, past experience and other factors. The credit risk related to the trade receivables is managed / mitigated by the concerned team based on the Company’s established policy and procedures and by setting
The Company performs on-going credit evaluations of its customers’ financial condition and monitors the credit-worthiness of its customers to which it grants credit in its ordinary course of business. The gross carrying amount of a financial asset is written off (either partially or in full) to the extent that there is no realistic prospect of recovery. This is generally the case when the Company determines that the debtor does not have assets or sources of income that could generate sufficient cash flows to repay the amount due or there are some disputes which in the opinion of the management is not in the Company’s favor. Where the financial asset has been written-off, the Company continues to engage in enforcement activity to attempt to recover the receivable due. Where recoveries are made, these are recognised in profit and loss.
iii) Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. Accordingly, as a prudent liquidity risk management measure, the Company closely monitors its liquidity position and deploys a robust cash management system.
Based on past performance and current expectations, the Company believes that the Cash and cash equivalents and cash generated from operations will satisfy its working capital needs, capital expenditure, investment requirements, commitments and other liquidity requirements associated with its existing operations, through at least
the next twelve months
C) Capital Risk
The Company’s objective while managing capital is to safeguard its ability to continue as a going concern (so that it is enabled to provide returns and create value for its shareholders, and benefits for other stakeholders), support business stability and growth, ensure adherence to the covenants and restrictions imposed by lenders and/ or relevant laws and regulations, and maintain an optimal and efficient capital structure so as to reduce the cost of capital. However, the key objective of the Company’s capital management is to, ensure that it maintains a stable capital structure with the focus on total equity, uphold investor; creditor and customer confidence, and ensure future development of its business activities. In order to maintain or adjust the capital structure, the Company may issue new shares, declare dividends, return capital to shareholders, etc.
The Company manages its capital structure and makes adjustments to it, in light of changes in economic conditions or its business requirements.
39) CAPITAL MANAGEMENT
Capital management and Gearing Ratio :
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. The primary objective of the company’s capital management is to maximise shareholder value.
The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. The Company monitors capital using a gearing ratio, which is debt divided by total capital. The Company includes within debt, interest bearing loans and borrowings.
Terms and conditions of transactions with related parties
1 The Company has been entering into transactions with related parties for its business purposes. Related party vendors are selected competitively in line with other unrelated parties having regard to strict adherence to quality, timely servicing and cost advantage. Further related party vendors provide additional advantages in terms of:
(a) Supplying products primarily to the Company,
(b) Advanced and innovative technology
(c) Customisation of products to suit the Company’s specific requirements, and
(d) Enhancement of the Company’s purchase cycle and assurance of just in time supply with resultant benefits-notably on working capital.
2 The purchases from and sales to related parties are made on terms equivalent to and those applicable to all unrelated parties on arm’s length transactions. Outstanding balances payable and receivable at the year-end are unsecured, interest free and will be settled in business transactions.
47) The Board of Directors, at their meeting held on May 2, 2024 proposed a final dividend of ' 1 per equity share for the year ended
March 31, 2024, subject to approval of shareholders. On approval, the total dividend outgo is expected to be ' 50.53 Crore based on number of shares outstanding as on March 31,2024.
48) Previous year’s figures are regrouped and rearranged wherever necessary.
49) Approval of Financial Statements on 02nd May, 2024
As per our Report of even date For and on behalf of the Board of Directors of
Lloyds Metals and Energy Limited
For Todarwal & Todarwal LLP
Chartered Accountants Sd/- Sd/-
Firm Registration No W100231/ 111009W Mukesh R. Gupta Rajesh Gupta
Chairman Managing Director
Sd/- DIN: 00028347 DIN: 00028379
Kunal Todarwal
Partner Sd/- Sd/-
Membership No 137804 Riyaz Shaikh Trushali Shah
UDIN : 24137804BJZWNQ1963 Chief Financial Officer Company Secretary
Membership No.-ACS-61489
Place : Mumbai Date : 02nd May, 2024
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